The Financial Reporting Council (FRC) of Nigeria, International Sustainability Standards Board (ISSB) and NGX Regulation Limited (NGX RegCo) on June 26, 2023 launched the first two IFRS Sustainability Disclosure Standards (IFRS S1 and IFRS S2 Standards).
The launch, which held at Nigerian Exchange Group house in Lagos makes Nigeria the first African country to adopt the standards, just as they were also launched in six major global financial centers including; New York, London, Frankfurt, Singapore, Santiago and Montreal.
Speaking at the launch, Shuaibu Adamu, Executive Secretary, FRC noted that it marks a historic milestone for Nigeria and is a testament to the country’s unwavering commitment to responsible and sustainable business practices. He also said that as Nigeria adopts the standards, it is setting a powerful example for other nations and reaffirming its position as one of the global leaders in sustainability reporting.
In his words:
“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.
Also speaking, Tinuade Awe, Chief Executive Officer, NGX RegCo 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.”
Ndidi Nnoli-Edozien, Board Member, ISSB said that ISSB was born at COP 26 as a sister entity to the International Accounting Standard Board (IASB) while noting that its intention to launch the standards was to see how Nigerian firms process sustainability, climate related risks and opportunities and embed them in their reporting to help guide capital flows.
According to Ndidi Nnoli-Edozien:
“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, Lamido Yuguda, Director-General, Securities and Exchange Commission (SEC) who was represented by Dayo Obisan, Executive Commissioner, Operations said:
“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.”
Commending the NGX RegCo and FRC, Emmanuel Faber, chair, ISSB said that the lack of comparability and ambiguity about the many available standards and frameworks have limited the effectiveness of reporting and the efficiency of capital markets.
Faber further stated that the standards are cost effective for reporters and useful for investors and added that organizations that use IFRS S1 and IFRS S2 Standards as a tool to communicate to investors will win a financing competitive advantage.
