Under the Southern African Development Community (SADC)-EU Economic Partnership Agreement (EPA), roughly 98% of South African exports enter the European market duty-free.

But the rules of global trade are changing. Europe’s sustainability agenda is turning regulatory compliance into a strategic risk for South African companies that cannot prove the environmental and social footprint of what they sell.

This risk is reflected in the 2026 Forvis Mazars C-Suite Barometer, where 27% of executives identified new or higher regulatory requirements as one of the external trends expected to have the greatest impact on operations over the next 12 months. Strategic priorities are shifting as a result, with 22% of respondents reviewing supply chains, operations and procurement processes over the next three to five years. 

At the centre of this shift is the EU’s sustainability strategy, anchored by the Corporate Sustainability Reporting Directive (CSRD). The CSRD sets out how in-scope companies must report their environmental, social and governance (ESG) performance.

For companies trading with Europe, the Carbon Border Adjustment Mechanism (CBAM), which entered its definitive regime in 2026, adds a further layer of complexity. CBAM puts a carbon price on selected carbon-intensive goods imported into the EU, aiming to equalise the cost of carbon between European producers and foreign suppliers. For South African exporters, the potential impact is significant, as CBAM can erode the duty-free advantage created by the SADC-EU EPA by requiring EU importers to account for the embedded emissions in covered goods.

CBAM data also supports the product-level carbon footprint information needed for Scope 3 reporting under the CSRD. Together, these rules have made supply-chain visibility a mission-critical commercial requirement, not simply a compliance exercise.

The complexity of these overlapping regulations is reshaping global trade. As the 2026 C-Suite Barometer notes, supply chains have become “the strategic battleground for ultimate success”.

Adaptability matters most here, as sustainability mandates, tariff pressures and regionalisation make global networks harder to manage. Yet business leaders are not standing still. The 2026 C-Suite Barometer shows confidence in managing supply-chain challenges and regulatory compliance has risen by nine percentage points, while ESG preparedness is up eight points.

Executives appear confident: 92% say they are prepared to manage sustainability requirements and supply-chain resilience, while 90% feel ready for new regulatory demands. However, that confidence now needs to translate into action, as CBAM will intensify competition and raise the regulatory cost of serving European customers.

As the Barometer reflects the global views from more than 3,000 executives across 40 countries, South African leaders should ask whether their organisations are ready for CBAM’s operational and financial impact. To compete under the CBAM regime, South African companies can no longer assess sustainability in isolation. The focus must extend beyond direct operations to the full value chain.

No company operates in a vacuum, as every business has customers downstream and suppliers upstream. As such, leaders must understand the emissions, inputs and practices that span their supply chains, because transparency is fast becoming a condition of global market access.

For exporters, CBAM compliance requires granular value-chain data. European buyers increasingly need to know where materials originate, what inputs are used, and what environmental and labour impacts are embedded in the products they purchase. Companies that cannot provide this information risk weakening customer relationships when those requests arrive.

Large JSE-listed companies supplying Europe may already have much of this data integrated into their reporting frameworks, however this is not always the case. Large private businesses and smaller listed companies are also likely to be more exposed.

As a major exporter of almost all carbon-intensive commodities specifically targeted by CBAM, such as iron, steel, aluminium, cement, fertilisers, and hydrogen, the stakes for South African businesses have never been higher. 

South Africa’s carbon-heavy electricity mix compounds the risk because power is a major production input. In sectors such as iron and steel, CBAM-related costs could narrow or eliminate the price advantage exporters have historically relied on.

As other countries and trade blocs adopt similar measures, the pressure to decarbonise will only intensify. The demand for transparency is also moving upstream. Companies are increasingly expected to show how they assess, monitor and improve the sustainability of their own suppliers.

Industry initiatives are helping to define good practice. Outside of commodities in scope for CBAM, the Better Cotton Initiative, for example, offers a framework for the water- and chemical-intensive textile sector to audit and monitor suppliers, while precious metal mining companies can draw on due-diligence guidelines, such as the London Bullion Market Association’s responsible sourcing accreditation for gold, and the London Platinum and Palladium Market’s equivalent for platinum group metals. 

Human capital is part of the same equation. South African companies are increasingly asked to confirm alignment with labour legislation, including any outsourced services, as buyers scrutinise supply chains more deeply. This scrutiny is not limited to heavy industry. The broader a company’s African footprint, the greater the need for verifiable data on how its supply chain is reducing emissions and managing social risk.

The services sector is also exposed. Banks and insurers may have lower direct emissions, but they face increasing scrutiny over financed emissions. As greenwashing concerns grow, the balance between green and high-emission asset financing (not just the quantum of green asset financing in isolation) is coming under closer review.

Building full supply-chain visibility and quantifying carbon costs is complex, and navigating Europe’s regulatory environment requires specialist expertise, credible data and strategic foresight.

For companies starting or accelerating their decarbonisation strategies, an audit and advisory partner can become a competitive advantage by conducting due diligence, guiding internal teams, and providing the external assurance increasingly required by international initiatives and European buyers.

Crucially, a partner with anintegrated European network can work collaboratively across borders to: 

• Navigate CSRD requirements 
• Quantify the financial impacts of CBAM
• Streamline approaches to local regulatory changes (such as the likely introduction of IFRS Sustainability Disclosure Standards (SDS)) to ensure effort made in relation to CSRD is not duplicated

By mapping the value chain and reducing environmental exposure, South African companies can assure stakeholders that they are monitoring partners, managing risk and protecting future demand.

As the 2026 C-Suite Barometer clearly states, adaptability is now central to business success. By embracing transparency and building more sustainable supply chains, South African companies can move beyond compliance and protect growth in one of their most important markets.

Scott Williams, Director of Business Sustainability at Forvis Mazars in South Africa