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•Says it’ll drive investment decisions, mobilise green finance
By Chinwendu Obienyi
In a bid to enable investors and stakeholders make better investment decisions as well as encourage corporates to adopt sustainability at the core value of financial reporting, the Financial Reporting Council (FRC) of Nigeria and International Sustainability Standard Board (ISSB) and NGX Regulation Limited (NGX RegCo) on Monday, launched the first two IFRS Sustainability Disclosure Standards (IFRS S1 and IFRS S2 Standards).
The launch which held at the Nigerian Exchange Group House in Lagos makes Nigeria the first African country to adopt the standards, which were also launched in six major global financial centres namely; New York, London, Frankfurt, Singapore, Santiago and Montreal.
Speaking at the launch, the Executive Secretary, FRC, Ambassador Shuaibu Adamu, noted that the launch marks a historic milestone for Nigeria and is a testament to the country’s unwavering commitment to responsible and sustainable business practices.
The ES also said that with Nigeria adopting these standards, it is setting a powerful example for other nations and reaffirming its position as one of the global leaders in sustainability reporting.
While explaining the reason for collaborating with the NGX RegCo and the ISSB, Adamu restated the need for private capital as the public sector budget is insufficient for sustainable development and added that the capital market is key to the mobilisation of private capital.
“Today, there is a growing global, environmental, social and governance investor base of over $2 trillion in global institutional investor funds under management.
No country or institution can attract or accept these private investment capital if you are not seen to be committed to climate and sustainable development.
Nigeria must therefore compete with the rest of the world for this private capital. Obviously, in Nigeria, the NGX provides a veritable platform to attract this capital. Comprehensive, comparable and transparent information about sustainability and climate related risks and opportunities will play an essential role in appropriately pricing sustainability related risk and opportunities to unlock the needed private capital flows.
The standards will deliver a common global language of sustainability disclosures, enhancing the communication between companies and investors. They will help support the mobilization of green finance in emerging markets and provide greater transparency when determining where or when to invest”, Adamu said.
Also speaking, the Chief Executive Officer, NGX RegCo, Ms Tinuade Awe, said that the launch is tremendous for the growth of the capital market as companies in Nigeria will now have a global baseline that it can use.
Awe, while calling for focus on the forthcoming standards, stated, “NGX RegCo remains committed to promoting a fair, transparent and orderly market that thrives on full and timely information needed for the protection of investors in the Nigerian capital market”.
In her remarks, Board Member, at ISSB, Ndidi Nnoli-Edozien, said that ISSB was born at COP 26 as a sister entity to the international accounting standard board while noting that its intention to launch the standards is to see how Nigeria take sustainability, climate related risk and embed them in investments so to help guide capital flows.
“There are close to 300 different standards and what we have done is create a single global baseline that is interoperable with standards such as GRI and reduce the cost of reporting burden”.
In a goodwill message, the Director-General, Securities and Exchange Commission (SEC), Lamido Yuguda who was represented by the Executive Commissioner, Operations, Dayo Obisan, said the launch of the ISSB Standards in Nigeria signals the country’s readiness to embrace sustainability as a core value in financial reporting practices.
According to Yuguda, this sends a strong message to the global community that Nigeria is committed to transparent and responsible business practices that prioritize environmental stewardship, social well-being as well as good governance
