Kigoda Consulting

Newsletter 2 – South Africa’s Election And TCFD

20 May 2019

Hello

As the dust of South Africa’s sixth democratic election starts to settle, I wanted to take the opportunity to update you on some of the key developments that investors should monitor in the coming weeks and months.

As Kigoda noted in a recent blog, South Africa’s 2019 election result, which saw the ANC win 57.5% of the total votes, is largely positive for investors. However, key ESG issues such as climate change were missing from the election campaign, and civil society is increasing filling the accountability gap. This can also be seen in the investment sector, where, on 30 May, Standard Bank will face South Africa’s first climate-risk shareholder resolution, which was filed by the RAITH Foundation and Theo Botha, with support from Just Share. You can find the blog post, which considers climate change, energy policy and the just transition, and governance issues relating to “state capture” here.

Political risk and energy policy: The 2019 election and its implications have dominated much of our clients’ interest during the past few months. We’ve been providing analysis of the potential implications for and timing of key policy decisions such as the Integrated Resource Plan for Electricity, Eskom’s restructuring, and new oil and gas legislation. These issues will be among those on the top of the investment agenda once a new cabinet is announced towards the end of May.

Task Force on Climate-related Financial Disclosures (TCFD): Companies around the world are facing growing pressure to be more transparent about the risks and opportunities they face from climate change. One of the main drivers behind the push for improved disclosure and transparency on climate risk exposure is the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD).

We recently undertook an assessment of the climate-related disclosures of 15 JSE-listed companies, including the ten largest emitters of greenhouse gases. The research considered the extent to which these companies report on climate change, and the quality of existing disclosures.

Unfortunately, the assessment is not yet publicly available. However, if you are interested in getting a better understanding of the implications of TCFD or having your company or portfolio assessed in terms of climate-related risks and disclosure, please get in touch.

Thanks for your support.

Mike

• Climate Change
• Political risk