Tinuade Awe, Chief Executive Officer (CEO), Nigerian Exchange Regulation (NGX RegCo) has urged public and private stakeholders to urgently prioritise the implementation of key national and global Environmental, Social, and Governance (ESG) related regulations.
This call to action was made at the 16th Annual International Business Law Conference themed “Recent Developments in the Business Law Environment”, hosted in Abuja by the Nigerian Bar Association Section on Business Law (NBA-SBL).
Speaking during a panel discussion focused on “ESG and the Nigerian Business Environment”, Awe noted that prioritising the implementation of key national and global ESG-related regulations will improve Nigeria’s ESG performance and reputation on the global stage and guarantee its contribution to the global development agenda such as the United Nations Sustainable Development Goals (SDGs) and the Paris Agreement. “The rapidly evolving global ESG landscape requires a deliberate partnership between all Nigerian public and private sector stakeholders who must embrace their responsibility to help create a sustainable future by being transparent in their approach to addressing ESG-related risks and opportunities, and their contribution towards sustainable development,” she added.
Awe charged the Nigerian government to adopt initiatives that accelerate progress towards mandatory reporting on key ESG-related issues as well as climate-related reporting. In her words, “These initiatives would ensure private and public sector companies become cognizant of global trends on climate-related reporting in line with leading guidance frameworks such as the Task Force on Climate-related Financial Disclosures (TCFD) recommendations as well as the International Sustainability Standards Board (ISSB) which has recently developed a comprehensive set of guidelines on general sustainability and climate-related disclosures to improve the availability of standardized, decision-useful non-financial data for the investment decision-making process”.
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Concerning NGX RegCo’s contribution to the development and implementation of ESG regulation in Nigeria, Tinuade cited the 2019 NGX Sustainability Disclosure Guidelines which provides issuers with a step-by-step approach to integrating sustainability in their organisational activities and operations. “These guidelines also provide guidance on best practice sustainability reporting that comply with global standards including the Global Reporting Initiative (GRI)”, Awe said. Furthermore, Awe noted the contribution of NGX RegCo to the development of Nigeria’s green bond market.
“NGX RegCo also played a leading role in developing the regulation for the development of Nigeria’s green bond market and other sustainable financial products that address environmental and social challenges affecting Nigeria along with the Federal Ministry of Environment, Nigerian Exchange Limited and other industry stakeholders. This was done in recognition of the climate finance needs particularly in Nigeria, and the urgent action required to combat climate change as enshrined in the Paris Agreement on Climate Change, and the efforts culminated in the issuance of the maiden N10.69Bn (c. $25.8 million) 13.48% 5-year green bond in 2017.
Additionally, Awe stated that NGX RegCo is working with NGX to develop a dedicated set of Climate Disclosure Guidelines that will address climate change-related issues and serve as a complementary set of guidelines to the NGX Sustainability Disclosure Guidelines. According to her, these guidelines which will be developed in line with the TCFD recommendations are currently in their formative stage. She added that the zero drafts will be published in a few months and public consultations for feedback are expected to follow afterwards.
NGX RegCo continues to promote sustainable business practices in Nigeria’s Capital Market by encouraging listed companies to adopt the best national and global ESG regulations. “Companies that successfully incorporate ESG frameworks into their business operations are considered responsible corporate citizens and can mitigate operational risks, attract sustainable investors, and generate long-term value,” she said.