The Securities and Exchange Commission (SEC) has given all public companies and significant public-interest capital market operators until October 15 to submit their implementation plans for adopting the International Financial Reporting Standards (IFRS) sustainability disclosure standards.

The directive is part of the commission’s move to ensure that affected entities are prepared for mandatory sustainability-related financial reporting from January 1, 2028.

The standards comprise IFRS S1, which sets out general requirements for disclosure of sustainability-related financial information, and IFRS S2, which covers climate-related disclosures.

They were adopted by Nigeria as part of efforts to strengthen sustainability reporting and promote transparent, comparable and decision-useful disclosures.

In a circular issued yesterday, the SEC directed all public companies and significant public-interest capital market operators to commence preparations for sustainability reporting in line with the implementation timelines contained in the Financial Reporting Council of Nigeria (FRCN) roadmap.

The roadmap, developed by the FRCN in collaboration with relevant stakeholders, including the SEC, provides for a phased implementation of the standards.

Under the roadmap, entities were encouraged to adopt the standards voluntarily for accounting periods ending on or before December 31, 2023, under the early-adoption phase.

The voluntary adoption phase applies to entities not yet subject to mandatory reporting, covering accounting periods beginning on or after January 1, 2024, through periods ending on or before December 31, 2027.

However, mandatory adoption will commence for public-interest entities, including all public companies and significant public-interest capital market operators, for accounting periods beginning on or after January 1, 2028.

Small and medium-sized entities will become subject to mandatory adoption for accounting periods beginning on or after January 1, 2030.

To assess the preparedness of regulated entities and facilitate a smooth transition to mandatory sustainability reporting, the SEC said each affected company and capital market operator must submit its implementation plan to the commission on or before October 15, 2026.

The plan must also identify challenges the entity anticipates in implementing the IFRS Sustainability Disclosure Standards.

According to the Commission, the implementation plan must cover governance arrangements for sustainability reporting, including board oversight, as well as a gap assessment against the requirements of IFRS S1 and IFRS S2.

The commission also defined significant public-interest capital market operators as entities that facilitate clearing, settlement, trading or data functions in the capital market.