NESREA to banks: Sustainability must be backed by compliance

By Faheem Lawal

The Director General, National Environmental Standards and Regulations Enforcement Agency (NESREA), Innocent Barikor, has told banks and other financial institutions that their sustainability commitments must be matched by measurable compliance with environmental laws.

Banks’ sustainability commitments are the steps they promise to take to make money and grow their business without harming the environment, society or the economy in the long run.

Barikor spoke in Lagos on Thursday at a one-day workshop on Environmental Management Systems and Regulatory Framework for banks and allied institutions in Lagos. It was held under NESREA’s Sustainable Financial Institutions Programme, with the theme “Strengthening Environmental Regulatory Compliance, Risk Governance and Sustainability Reporting across Nigeria’s Financial Sector”.

In his opening remarks, Barikor said recent environmental compliance assessments of banks had exposed compliance gaps, statutory obligations and outstanding environmental liabilities in the sector.

He said the workshop was not meant to embarrass any institution but to provide clarity and support compliance regularisation.

“The message from NESREA is simple. Sustainability must be backed by compliance. It must be measurable, reportable, auditable,” he said.

The DG urged financial institutions to pay closer attention to environmental audits, statutory certifications, e-waste and battery management, generator emissions and waste management. He also called for environmental risk screening in lending and investment decisions.

He noted that banks influence environmental performance beyond their own offices because they finance industry, infrastructure, housing, agriculture and manufacturing.

He argued that enforcement was costly for both the agency and the institutions involved.

“It’s more expensive to enforce, both on our side and on your side.

So why don’t we have a middle ground, which is voluntary compliance,” he said.

“The agency would charge administrative fees for enforcement actions,facilities would be sealed immediately only where lives were at risk, though the agency also weighs the economic contribution of the affected businesses”, he added.

Citing the polluter pays principle, Barikor recalled a recent chemical spill from a truck travelling between Abuja and Kaduna. He said NESREA traced the companies involved and directed them to take responsibility, and that clean-up had begun.

“NESREA was reducing lengthy compliance reports to data points, such as generator stack height, to speed up review and improve analytics, independent consultants would still be needed to provide third-party assessment” He said.

On the overlap between federal and state rules, he explained that the environment sits on the concurrent legislative list. States can therefore adopt NESREA’s national minimum standards and make them stricter, as Lagos has done. He said the joint battery enforcement with the Ogun State Environmental Protection Agency was a model NESREA hoped to replicate to ease business.

In his presentation, the Managing Director of Doland Resources and Services Limited, Engr Lanre Eyinfunjowo, urged banks to start Environmental Impact Assessment (EIA) work early. He described it as a planning tool that should begin a year or two before a project starts, not after construction.

“You don’t do EIA when the project is ongoing,” he said.

Eyinfunjowo said many banks had not applied for air quality or waste and toxic substances permits. He also said few monitor emissions from their generators, and that many do not know toner cartridges are hazardous waste.

He recalled that a bank was sealed off about two years ago by the Lagos State Wastewater Management Office for discharging untreated sewage into a water body. He urged institutions to keep a legal register of applicable regulations, adding that “ignorance is not an excuse”.

The Director of Inspection and Enforcement at NESREA, Dr Christopher Beka, also spoke at the event. Representatives of the Central Bank of Nigeria, bank chief executives and compliance, risk and sustainability officers attended.