In an address at the Bloomberg Sustainable Finance Conversations, South African Reserve Bank Deputy Governor Fundi Tshazibana outlined plans to strengthen the central bank’s climate and nature risk analysis over the next year. The work will include monitoring the adoption of International Sustainability Standards Board disclosures, integrating climate information into regulatory data and developing a dashboard of macroeconomic and firm-level indicators for physical and transition risks. The dashboard will later expand to cover green assets, nature and social indicators, while a Sustainable Finance Initiative survey will assess financial industry progress and practices on nature risks. Tshazibana emphasized that banks and insurers should incorporate material climate and nature risks into their established governance, strategy and frameworks for credit, market, insurance, operational and strategic risks. The Prudential Authority’s existing guidance sets proportionate minimum supervisory expectations covering governance, disclosure, liability, compliance and transition planning. Disclosures should support risk pricing through clear materiality assessments, data ownership, transparent methodologies and credible internal controls rather than simply increasing the volume of reported information. The South African Reserve Bank is assessing critical water infrastructure from a financial stability perspective and incorporating drought and flood risks into climate stress testing. Prudential work on insurance protection gaps will initially focus on property insurance and flooding. Tshazibana also called for shorter-term scenarios alongside long-term pathways and urged institutions to broaden transition plans beyond emissions mitigation to include measurable adaptation and nature resilience, particularly for water-sensitive sectors such as agriculture, mining, energy generation and food processing.

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