Why sustainability reporting could be key to unlocking funding for SA businesses

South African businesses, especially exporters, are under growing pressure from changing global trade rules and extreme weather. But a University of Johannesburg (UJ) researcher says sustainability reporting should not be seen as another costly business requirement, it could help companies secure funding and stay competitive.

Dr Milan van Wyk, a senior lecturer in UJ’s department of accountancy, said many companies still viewed sustainability as an unnecessary expense.

“Many argue that sustainability costs money, but with many changes in the natural environment, geopolitics and climate disasters, the cost of doing nothing will far exceed the cost of implementing integrated sustainability thinking in an organisation,” he said.

Van Wyk’s doctoral research found that sustainability reporting can help businesses create long-term value. He said companies that produce reliable sustainability reports can improve their chances of attracting investment.

“Companies can use sustainability reporting as a mechanism to unlock funding for business growth,” he said.

“Many banks and investment institutions are focused on increasing their exposure to sustainability funding and investments. This creates opportunities to access these funds — if a company provides reliable information in its sustainability reports to showcase a commitment to sustainability and decarbonisation strategies.”

Van Wyk was recently appointed to the South African Institute of Chartered Accountants’ sustainability technical committee for a three-year term. He said his role was to help professionals understand how sustainability affects businesses and how it can be built into business models.

“For me, the shift in thinking towards sustainability is more important than the reporting. Incorporating sustainability into business models is becoming a necessity, especially if South Africa wants to remain competitive globally,” he said.

He warned that companies that fail to adapt could struggle as new international trade rules come into effect. One example is the EU’s carbon border adjustment mechanism (CBAM), which will place carbon taxes on certain exports.

“If you look from a CBAM perspective, base metals, including steel and alloys, will be quite heavily affected by the additional carbon taxes on exports to the EU. If companies do not adapt by decarbonising their operations, they could risk losing significant exports to the EU over the medium term, which could pose a significant risk for the economy. This could lead to a reduction in GDP and job losses in these sectors,” he said.

Van Wyk said agricultural exporters also faced growing risks because they are directly affected by changing weather conditions.

“They are inherently exposed to the weather patterns and climate events,” he said.

He said floods can delay planting, wash away vineyards and orchards, and damage roads and transport routes, making it harder to get produce to market. South Africa is expected to face the effects of a looming El Niño weather pattern beginning in the second part of 2026, bringing the risk of severe drought and extreme heat.

Van Wyk said sustainability should become part of everyday business decisions rather than simply being treated as a regulatory requirement.

“Sustainability should become a standing discussion point in boardrooms and be embedded in companies’ business models, rather than just seen as compliance with changing regulations,” he said.

“To achieve sustainability with impact, organisations will require a dedicated effort to work across silos. It will mean working purposefully with government, regulators, suppliers, customers and society.”

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