The Chief Executive Officer, NGX Regulation Limited (NGX RegCo), Ms Tinuade Awe, has urged companies to incorporate Environmental, Social, and Governance (ESG) considerations into their overarching business strategies, emphasizing the importance of listed companies aligning their ESG reporting with their business objectives, data management, and governance practices.
Ms. Awe conveyed this perspective during a Roundtable themed; 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.
Explaining how companies can integrating ESG factors into their financial reporting, she noted that businesses aiming to engage in ESG reporting must establish a clear ESG strategy that aligns with their business goals. She urged these companies to seek expert guidance and systematically monitor ESG-related data to facilitate accurate reporting. According to her, this approach is pivotal in encouraging prompt adoption of ESG reporting among NGX-listed firms.
Furthermore, Ms. Awe emphasized that companies that successfully integrate ESG reporting into their operational framework are 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, approximately 50% of listed companies on NGX have fully integrated sustainability reporting into their annual reports or have released dedicated standalone reports. She pointed out that the practice of ESG reporting will enhance Nigeria’s global standing in terms of ESG performance and reputation. She urged corporate entities to embrace this initiative, as it would contribute to Nigeria’s aspiration of achieving carbon neutrality by 2060.
Responding to questions about potential penalties for companies that fail to adopt ESG reporting, Ms. Awe noted that NGX has sustainability disclosure guidelines that became effective in 2019. However, she indicated that these guidelines would be reviewed in accordance with the emerging International Sustainability Standards Board (ISSB) Standards, alongside the evolving landscape of global ESG expectations.
In light of the rapidly evolving global ESG landscape, Ms. Awe stressed the necessity for a deliberate partnership between both public and private sector stakeholders in Nigeria as this would enable them to embrace their shared responsibility in building a sustainable future. She noted that ESG reporting not only raises awareness of worldwide trends in climate-related reporting but also aligns with established guidance frameworks such as the Task Force on Climate-related Financial Disclosures (TCFD) recommendations and the recently introduced International Sustainability Standards Board (ISSB) S1 and S2 standards.