Environmental, Social, and Governance (ESG) has become a vital framework for assessing the broader societal impact of organisations, going beyond traditional financial metrics. In 2025, ESG will play a pivotal role in shaping South Africa’s business landscape, reflecting a growing commitment to sustainability, climate resilience, and inclusion. Understanding and tracking these trends is essential to maximise opportunities for innovation, collaboration, and long-term impact.
- Evolving regulatory frameworks
In the past 10 years, ESG regulations have increased 155% globally. In South Africa, regulatory frameworks are emerging as a key driver of ESG adoption, reflecting the country’s commitment to aligning with sustainability standards worldwide. Recent developments include the Johannesburg Stock Exchange (JSE)’s ESG disclosure requirements for listed companies and the Green Finance Taxonomy, ensuring more transparent reporting on ESG impacts. Looking ahead, organisations will have to continue navigating this evolving regulatory environment. Companies that are proactive about these changes can gain a competitive edge, enhance their reputation, and secure long-term growth in an increasingly sustainability-focused market.
- Climate-related risks and accelerating adaptation strategies
According to the World Meteorological Organisation, 2024 was the world’s hottest year yet, with rising temperatures causing more frequent extreme weather events. Mitigating climate-related risks and adopting adaptation strategies are increasingly a business priority. By investing in resilient infrastructure, conducting comprehensive climate risk assessments, and embedding climate action into their strategic planning, organisations can not only ensure their sustainability but also contribute to overcoming climate-related challenges in the economy. South Africa’s recently promulgated Climate Change Bill aims to develop an effective response to climate change and facilitate a just transition to a low-carbon and climate-resilient economy.
- The ‘S’ in ESG
Social responsibility is becoming a cornerstone of corporate strategy in South Africa, to address the country’s deep socio-economic inequalities. In 2025 and beyond, companies are expected to intensify their efforts in promoting inclusivity and socioeconomic upliftment, particularly in vulnerable communities. Supporting initiatives such as skills development, small business growth, and access to economic opportunities not only aligns with national priorities but also enhances corporate reputation and fosters goodwill among stakeholders. Private sector partnerships with government and civil society can help to tackle South Africa’s social challenges, including youth unemployment, gender-based violence, and access to quality education, and drive meaningful change while contributing to sustainable development.
- A just transition to a low-carbon society
South Africa’s transition to renewable energy presents both a critical necessity and a significant opportunity, as the country faces an energy crisis and a heavy reliance on coal. The government’s Just Energy Transition Investment Plan (JET-IP) is paving the way for increased private-sector participation, driving investments in solar, wind, and other sustainable energy sources. A just transition is critical to South Africa, ensuring that the shift to a low-carbon economy is inclusive and equitable, particularly for workers, communities, and vulnerable groups who depend on our energy sector for livelihoods while promoting sustainable opportunities. In addition, businesses are adopting renewable energy solutions to lower operational costs, and meet carbon neutrality goals, fuelled by regulatory incentives and the pressing need for energy security.
- The circular economy
The circular economy is gaining traction in South Africa due to its potential to drive sustainable development while addressing critical social and environmental challenges. By shifting from a linear ‘take-make-dispose’ model to one that emphasises reuse, recycling, and resource efficiency, businesses can reduce waste and lower their environmental impact. Producers are increasingly contributing to the circular economy by complying with the government’s Extended Producer Responsibility (EPR) policy, which holds them accountable for their products’ environmental impact throughout their lifecycle and drives commitment to recovery and recycling programmes. A circular economy not only fosters innovation and job creation but also aligns with global sustainability goals, making it increasingly attractive to investors and consumers who prioritise responsible practices.
- Leveraging artificial intelligence for ESG strategies
Artificial intelligence (AI) is emerging as a transformative tool for advancing ESG objectives. AI is helping companies monitor ESG performance, improve data quality, forecast risks, make data-driven decisions and optimise resource use, from energy to water consumption. About two-thirds of chief executives surveyed by Accenture believe that the technology will decrease emissions over the next decade. Beyond business operations, AI applications are expanding access to critical services like education and healthcare, driving inclusion. As the synergy between AI and ESG continues, ethical AI governance will become a critical focus to ensure initiatives align with principles of privacy, fairness, and transparency.
These ESG trends will inevitably be shaped by the ongoing shifts in the global geopolitical order and emerging international alliances. As nations recalibrate their trade relationships and strategic partnerships in response to changing power dynamics, South Africa’s ESG landscape may experience both challenges and opportunities. Organisations will need to remain agile, monitoring how these intertwined political and environmental realities might alter regulatory frameworks and ESG priorities.
At Vodacom, we believe that the integration of ESG principles is not just a business imperative but can create a meaningful difference in the communities we serve while building a future-ready organisation. By steadily strengthening ESG integration, we seek to enhance stakeholders’ trust, empower people, and help protect the planet.