Sunday, April 14, 2024

Nigeria leading Africa in embracing global sustainability reporting standard

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Nigeria has embarked on a journey to adopt the International Sustainability Standard Board (ISSB)’s Sustainability Financial Reporting Standard, marking a significant milestone as the first country in Africa to prioritize such disclosures. 

The Financial Reporting Council of Nigeria (FRCN) and NGX Regulation (NGX RegCo) have signaled their readiness to implement the roadmap, with the ISSB pledging to provide necessary technical assistance to facilitate the adoption process. 

During a special session convened in Lagos by FRCN and NGX RegCo, key stakeholders, including the Chairman of the International Sustainability Standard Board (ISSB) and IFRS Foundation, Mr. Emmanuel Faber, emphasized that the adoption would enhance Nigeria’s attractiveness as a global investment destination. 

Faber stressed the importance of integrating sustainability standards into financial reporting, highlighting the need to address climate change and transition risks. He underscored that conventional accounting practices often overlook crucial aspects such as long-term considerations, national assets, and human capital, all of which are encompassed within sustainability standards. 

Emphasizing the significance of the ISSB sustainability financial reporting standard, Faber asserted that it would enhance transparency and credibility for Nigerian communities and corporations, fostering trust among supply chains and investors through appropriate metrics. 

Pledging full support from the ISSB, Faber reiterated the commitment to assisting Nigeria in implementing the sustainability standard roadmap, thereby establishing resilient business models and economic stability. 

Acknowledging the collaborative efforts, the Chief Executive Officer of the Financial Reporting Council of Nigeria (FRCN), Mr. Rabiu Olowo, lauded the launch of the roadmap as a testament to Nigeria’s leadership role in adopting ISSB’s sustainability standards. 

Olowo highlighted President Bola Tinubu’s commitment to the ISSB’s proposition and framework for sustainability standards, which was expressed during the ISSB team’s visit to Abuja. 

The unveiling of the roadmap aligns with ISSB’s introduction of its inaugural sustainability standards, including IFRS S1 for sustainability-related financial information disclosure and IFRS S2 for climate-related disclosure in June 2023. 

The FRCN issued an exposure draft on the sustainability reporting roadmap in Nigeria on February 1, with the exposure period concluding on March 14, demonstrating proactive steps toward embracing global sustainability standards. 

Dr. Edward Mungai
Dr. Edward Mungaihttp://www.edwardmungai.com/
The writer, Dr. Edward Mungai, is a global sustainability expert. He is the Lead Consultant and Partner at Impact Africa Consulting Ltd (IACL), a leading sustainability and strategy advisory in Africa. He is also the Chief Editor at Africa Sustainability Matters. He can be contacted via mailto:edward@edwardmungai.com

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