The Chief Executive Officer of NGX Regulation Limited (NGX RegCo), Ms Tinuade Awe, has advised Nigerian banks to integrate environmental, social, and governance (ESG) principles into their business strategies in line with best practices for global competitiveness.
She gave the charge on Thursday during her contributions in a panel session titled “ESG in the Financial Services Industry: Challenges, Opportunities, and the Next Steps,” at the ongoing the 16th Annual Banking and Finance Conference organized by the Chartered Institute of Bankers in Nigeria (CIBN) in Abuja.
Awe explained that following Nigeria’s commitment to adopt the International Sustainability Standards Board (ISSB) standards, integrating the ESG principles into the bank’s operational strategies would position the banks at the competitive edge of the global financial market.
The investment expert pointed out that ESG reporting remained a dynamic and significant issue with various global standards and frameworks now in place, leading to complexity for both investors and companies worldwide.
The NGX RegCo’s boss also noted the growing international consensus on the necessity for standardized ESG reporting, adding that Nigeria’s banking sector could play a pivotal role in adopting and implementing these standards.
Awe said: “Early adoption of ESG standards, particularly those established by the ISSB, is a critical move for Nigeria, including its banking sector.
“It ensures consistency, attracts foreign investment, and allows Nigeria to have a voice in shaping its own ESG reporting criteria”, she added
Speaking on the importance of avoiding fragmentation and the opportunity for Nigeria to establish its unique cultural and social identity within the ESG reporting framework, rather than being subject to foreign standards, she stressed that the introduction of the European Sustainability Standards by the European Union could have ripple effects beyond the EU, potentially affecting Nigeria.
Similarly, the investment expert said that the ISSB would commence the implementation of its IFRS 1 and 2 standards in January 2024 and harped on the imperative of collaboration among relevant institutions to prevent fragmentation and ensure a unified approach to ESG reporting in the country.
Awe added: “Embracing ESG principles is not only a strategic move for Nigerian banks but also an opportunity for the country to define its role in the global ESG landscape.”
