Assessing International Interoperability and Usability of the South African Green Finance Taxonomy

The study finds that while the South African Green Finance Taxonomy (SA GFT) shows high international interoperability regarding its 'Make Substantial Contribution' (MSC) pillar and climate change mitigation priorities, it faces significant usability and adoption challenges regarding the 'Do No Significant Harm' (DNSH) and 'Minimum Social Safeguards' (MSS) pillars. The document recommends introducing more flexible classifications, such as an 'eligible vs aligned' system, increasing the use of quantitative thresholds and international standards (e.g., ISO), and integrating national regulations like the B-BBEE Act into the MSS framework to reduce ambiguity and compliance burdens for market participants.

• The SA GFT exhibits high international alignment and interoperability, particularly through its broad coverage of economic sectors and activities under the 'Make Substantial Contribution' (MSC) principle and its prioritisation of climate change mitigation to align with the Paris Agreement.
• The usability and adoption of the SA GFT are hindered by difficulties in demonstrating alignment with the 'Do No Significant Harm' (DNSH) and 'Minimum Social Safeguards' (MSS) pillars, as well as a lack of clarity in governance, disclosure frameworks, and compliance incentives.
• To improve the DNSH pillar, the document suggests moving away from an 'all-or-nothing' approach by adopting an 'eligible vs aligned' classification system and increasing the use of quantitative thresholds to reduce discretionary judgements.
• The DNSH criteria suffer from a lack of traceability; although 57% of generic DNSH criteria include thresholds, many are not linked to specific regulations or standards, creating uncertainty regarding their alignment with international goals.
• For the MSS pillar, the report recommends integrating specific South African national regulations, such as the Broad-based Black Economic Empowerment (B-BBEE) Act 53 of 2003 and the Women Empowerment and Gender Equality Bill of 2013, and developing standardised metrics aligned with frameworks like GRI, SASB, and the JSE.

APA

Climate Policy Initiative (2025). Assessing International Interoperability and Usability of the South African Green Finance Taxonomy. https://www.climatepolicyinitiative.org/publication/assessing-international-interoperability-and-usability-of-the-south-african-green-finance-taxonomy/

Chicago

Climate Policy Initiative. Assessing International Interoperability and Usability of the South African Green Finance Taxonomy. 2025. https://www.climatepolicyinitiative.org/publication/assessing-international-interoperability-and-usability-of-the-south-african-green-finance-taxonomy/.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=Assessing International Interoperability and Usability of the South African Green Finance Taxonomy |date=27 February 2025 |url=https://www.climatepolicyinitiative.org/publication/assessing-international-interoperability-and-usability-of-the-south-african-green-finance-taxonomy/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2025assessing, author = {{Climate Policy Initiative}}, title = {{Assessing International Interoperability and Usability of the South African Green Finance Taxonomy}}, institution = {Climate Policy Initiative}, year = {2025}, month = feb, url = {https://www.climatepolicyinitiative.org/publication/assessing-international-interoperability-and-usability-of-the-south-african-green-finance-taxonomy/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }