HEADER ESG gap. Agencies including the US Securities and Exchange Commission, the UK Competition and Markets Authority, and European regulators have intensified scrutiny of misleading sustainability claims. In late 2024, Invesco agreed to pay a $ 17.5 million civil penalty to settle SEC charges that it had made misleading statements about the percentage of assets under management that integrated ESG factors. Sanjay Wadhwa, Acting Director of the SEC’ s Division of Enforcement, was direct:“ Saying it doesn’ t make it so.”
In the UK, the Economic Crime and Corporate Transparency Act’ s failure-to-prevent-fraud offence, which came into effect in September 2025, has widened the risk environment for large companies where dishonest claims are made for corporate benefit. Courts and regulators are catching up with the gap between declaration and evidence.
The domestic picture is patchy too. South Africa has a long history of integrated reporting, and King IV’ s“ apply and explain” approach was designed to move companies away from box-ticking towards meaningful transparency. Yet recent studies suggest that disclosure maturity remains uneven: among JSE-listed companies, only 36 % disclose net-zero commitments and around 30 % disclose emissions or reduction targets, while one 2025 survey of 281 JSE-listed companies found that just 19.6 % had obtained independent third-party assurance on ESG disclosures.
Research from Henley Business School Africa has also found that many JSE-listed firms are using ESG defensively, to avoid the destruction of value or optimise existing value, rather than to create new value and build competitive advantage.“ South African firms are engaging with ESG, but they are mostly playing it safe,” the researchers concluded.
This is the context in which Loshni Naidoo of the JSE argues that credible ESG reporting is distinguished by specificity, consistency, comparability, and evidence. Rather than sweeping aspirational language, she says credible reporting connects sustainability priorities to corporate strategy, quantifies performance against defined material metrics, and discloses both progress and shortcomings. The purpose is to allow stakeholders to assess real impact rather than intent.
A sustainability report can be polished and still leave the reader unsure what has changed. It can describe a company’ s values without showing whether those values have altered capital allocation, board oversight, remuneration, procurement, or risk management. It can speak warmly about communities, climate, and transformation while withholding the numbers, missed targets, and trade-offs that would make the report credible.
Naidoo says companies can build trust by focusing on data integrity, transparency, and materiality. That means disclosing decision-useful information tied to financial outcomes, setting measurable targets, reporting progress or the lack of it, and demonstrating accountability at board and executive levels.
It also means showing how ESG risks and opportunities are integrated into capital allocation, and how sustainability is embedded across operations. In Naidoo’ s words, stakeholders need to see“ the shift from marketing narratives to verifiable performance and outcomes”. sabusinessintegrator. co. za 61