On 23 July 2024, President Cyril Ramaphosa signed the Climate Change Act into law, establishing a comprehensive framework for South Africa's climate policy. However, the Act will not be effective immediately; it requires a future proclamation by the President to be operational.

The Climate Change Act, developed over several years, is pivotal for South Africa's efforts in adapting to and mitigating climate change. It enshrines the country's commitments to reducing greenhouse gas (GHG) emissions, as outlined in the latest Nationally Determined Contribution under the Paris Agreement, into national law.

This Act overrides all prior climate-related laws, mandating detailed planning across all levels of government to promptly address climate change. It introduces a system of carbon budgets that limit GHG emissions for major polluters, who must also submit comprehensive plans to comply with these limits. Additionally, the Act sets sector-specific emissions targets to fairly distribute allowable emissions among different industries.

Although the Act has been passed, its full implementation depends on the establishment of detailed regulations, including those for carbon budgets and mitigation plans. These regulations must feature stringent enforcement mechanisms to ensure actual compliance and effective climate action.

For accountants, this Act signals significant changes in how businesses will need to manage and report on environmental impacts and compliance. It emphasises the integration of climate considerations into financial strategies and operations, reinforcing South Africa's commitment to building a resilient and sustainable future. This legislation not only aims to align various government policies with climate objectives but also makes climate change mitigation and adaptation central to national governance, underscoring the urgent need for actionable measures to mitigate environmental risks.