The B20 is a forum that brings together senior business leaders and organizations from South Africa and across the African continent, as well as business leaders from G20 countries. Hosted by Business Unity South Africa (Busa), the largest business organization in the country, the B20 in South Africa is addressing numerous issues related to business, often in conjunction with other sectors of society, including government. The forum has eight task forces, led by prominent business figures, which are developing and delivering policy papers with practical and implementable recommendations. These recommendations will be handed over to the South African president for consideration by the G20 before their summit in November.

The B20 task forces are looking at regulation and deregulation through the lens of their impact not just on business profitability, but on the role of business in growing inclusive societies, contributing to community development, and addressing inequality. They are examining how business can work with governments, particularly in countries with capacity constraints, to enable effective governance. The recommendations will focus on practical, implementable actions regarding the regulatory environment, encompassing the role of government in regulating, the importance of self-regulation, and considering deregulation under certain circumstances.

The B20 in South Africa believes that the debate on regulation and deregulation must be informed by discussions that create an environment where critical sectors can optimize their roles. While acknowledging that government is responsible for regulation and enabling an environment for self-regulation, the B20 is of the view that regulations are necessary to enable businesses to be profitable and contribute to solving societal problems. The perspective is that there needs to be a move towards self-regulation where possible, with government oversight to ensure that self-regulation protects society and aligns with a societal contract between government, business, and other sectors. The ultimate test of this balance is whether it achieves a contract between these parties that fosters inclusive growth.

While the US has seen some backtracking on environmental regulations, countries in Asia and the Gulf Cooperation Council (GCC) are largely staying on course or moving forward with sustainability reporting and regulation. China, in particular, has issued ISSB-aligned sustainability reporting requirements, emphasizing “double materiality” (impact on planet/people and the social aspect), and is implementing significant measures including potential public interest litigation for environmental damage. President Xi Jinping’s public commitment to covering all economic sectors and greenhouse gases in China’s Nationally Determined Contribution (NDC) by COP30 signifies a strong commitment. Japan and ASEAN countries are also adopting ISSB standards. The GCC countries are introducing their first disclosure requirements, recognizing the changing global landscape and the need to diversify their economies and attract capital.

The Omnibus action on April 16th aimed to simplify the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). Being directives, violations typically result in civil law cases, making them less stringent than regulations. The “stop the clock” action in April indicated a pause for consolidation and harmonization. While there has been some watering down of requirements, such as the “do no significant harm” principle under the EU taxonomy, the financial sector’s integrity is still a focus, with the review clause for this sector being retained. The European Central Bank (ECB) regretted the removal of the empowerment to develop sector-specific reporting standards, recognizing the value of industry self-regulation. Concerns were also raised about potentially widening data gaps due to the turnover threshold for third-country firms.

One example from South Africa is the deregulation that removed the 10-megawatt limit on embedded energy generation for the private sector. This change, prompted by interactions between the private sector and government due to the power utility’s inability to provide consistent energy, has resulted in significant investment (around 14 to 15 billion rand) in private sector renewable energy projects, benefiting citizens. Another area where deregulation can have positive impacts is in streamlining permitting processes, which can accelerate the deployment of renewable energy projects. Waiving licensing fees for off-grid solar companies is another example of deregulation that can accelerate the just transition to decarbonization and a nature-positive future.

Collaboration is seen as crucial for developing effective regulation. In South Africa, there has been a structured partnership between business and government, led by the president and senior business leaders, to address regulatory issues hindering progress in areas like energy and logistics. This partnership, with regular high-level meetings, has helped unblock issues and speed up regulatory processes. In Hong Kong, a consultative approach is taken for setting rules and regulations, involving a cross-agency steering committee with representatives from government bodies and the private sector to ensure collective input. Effective collaboration requires understanding the language and perspectives of different sectors and finding common ground.

Both governments and businesses have roles to play in contributing to the public good. Governments, particularly in representative democracies, are designed to act in the public interest and consider the longer-term well-being of society. Businesses, while primarily focused on profitability, are increasingly recognizing their role in addressing societal problems and contributing to inclusive growth. While the degree to which either prioritizes the public good can be context-specific, there is a growing understanding that a societal contract exists where business activities should also benefit communities and not just shareholders. Collaboration and a clear theory of change for regulatory actions are needed to ensure that both sectors contribute effectively to the public good.