Tax has been identified as the key driver for the green policy in South Africa, auditing firm KPMG International said on Wednesday.
"KPMG International has named South Africa as the 13th most active country, out of 21 major global economies, in using tax as a tool to drive sustainable corporate behaviour and achieve green policy goals," it said in a statement.
The finding is contained in the first KPMG Green Tax Index launched at the 2013 KPMG Asia Pacific Tax Summit in Shanghai at the end of April.
"The KPMG Green Tax Index uses a proprietary scoring methodology to rank countries according to the extent to which they use their tax systems to drive sustainable business behaviour and achieve green policy goals," the company said in a statement.
The index explores how governments use their tax systems in response to global problems, such as energy security, water and resource scarcity, pollution, and climate change.
The six countries which top the index are the United States, Japan, Britain, France, South Korea and China.
South Africa ranks ahead of countries, such as Australia, Finland, and Singapore.
South Africa ranks third on water efficiency, third on pollution control and ecosystem protection, fourth on energy efficiency, and sixth on carbon and climate change.
"It should also be noted that South Africa has many green tax instruments in the pipeline; soon to be implemented is the proposed carbon tax and the energy efficiency tax incentive," KPMG said.
"Therefore, it is a strategic imperative for companies to understand the green tax environment and its implications for their business."
KPMG International said green tax could have an intrinsic affect on corporate investment decisions, especially for multinational businesses, and could make or break projects by cutting costs, increasing efficiency, driving innovation, and enabling transformation.