The Chief Executive Officer of the NGX Regulation Limited (NGX RegCo), Ms Tinuade Awe, has charged business owners in the country on the need to incorporate Environmental, Social, and Governance (ESG) considerations into their business strategies to enhance their financial reporting standards and governance practices.
The investment expert gave this advice during a Roundtable with the theme ‘ESG Activity Reporting and Sustainable Investing’ at the Africa Social Impact Summit 2023, hosted by Sterling One Foundation and the United Nations Nigeria in Lagos.
Speaking on how the corporate entities can integrate ESG factors into their financial reporting, the NGX RegCo boss pointed out that businesses aiming to engage in ESG reporting must establish a clear ESG strategy that aligns with their business goals and seek expert’s guidance and monitor ESG-related data to facilitate accurate reporting
She explained that companies that successfully integrate ESG reporting into their operational framework were usually considered responsible corporate citizens, as such companies are better equipped to mitigate operational risks, attract sustainable investors, and generate long-term value.
According to her, about 50% of listed companies on NGX have fully integrated sustainability reporting into their annual reports or have released dedicated standalone reports.
Awe further clarified that the practice of ESG reporting would enhance Nigeria’s global standing in terms of ESG performance and reputation and urged listed entities on the Exchange to embrace this initiative as it would contribute to Nigeria’s aspiration of achieving carbon neutrality by 2060.
Commenting on the likely penalties for companies that fail to adopt ESG reporting, Awe disclosed that NGX had sustainability disclosure guidelines that became effective in 2019, adding, however, that the guidelines will be reviewed in accordance with the emerging International Sustainability Standards Board (ISSB) standards to align with the emerging landscape of global ESG expectations.
She also harped on the need for partnership between both public and private sector stakeholders in Nigeria in view of the rapidly evolving global ESG landscape as doing so would enable them to embrace their shared responsibility in building a sustainable future.
