Nigeria’s financial services sector has emerged as the country’s strongest performer in environmental, social and governance (ESG) standards, with Zenith Bank Plc, Stanbic IBTC Holdings Plc and Access Holdings Plc leading the pack, according to the 2025 IPMC ESG Ratings Report released yesterday in Lagos.

The report, which assessed more than 120 companies across five key sectors—manufacturing, financial services, oil and gas, telecommunications, and professional services—highlighted significant gaps in Nigeria’s overall ESG compliance, placing the country third in Africa behind Kenya and South Africa with a performance level of approximately 32 per cent.

The three leading banks recorded the highest levels of structured sustainability integration, board-level oversight and transparent ESG reporting.

Zenith Bank achieved an overall ESG score of 39 per cent with balanced performance across Environmental (14 per cent), Social (18 per cent) and Governance (39 per cent) metrics. Stanbic IBTC Holdings followed with 34 per cent, demonstrating strong alignment with International Sustainability Standards Board (ISSB) principles through sustainability-linked finance and transparent governance reporting, while Access Holdings secured 32 per cent by integrating ESG at the enterprise level and linking it to lending criteria and customer engagement.

Despite the sector’s governance strength, the report flagged significant weaknesses in climate-risk disclosures required under IFRS S2. Only 12 per cent of assessed institutions disclosed financed emissions or climate-related credit exposures, creating what the report described as “a major blind spot” under Task Force on Climate-related Financial Disclosures (TCFD) and IFRS S2 principles.

“The sector demonstrates the strongest governance maturity, with near universal disclosure of board composition, risk management policies, and audit procedures. However, only 12 per cent disclose financed emissions or climate-related credit exposures, creating a major blind spot under TCFD and IFRS S2 principles,” the report stated.

Speaking at the launch, Chairman of IPMC Nigeria, Robert Ade-Odiachi, stressed that poor ESG compliance reflects weak governance and ultimately leads to lower returns on investment. He revealed that the organisation’s ESG ratings are based on extensive data collection, including repeated requests to companies and publicly available information when firms fail to provide disclosures.

“Our objective is to raise these issues and let everybody see how we can carry out remedial action where we are so low with compliance. If you are low in the ESG rating, it shows that you are not properly being managed. Your governance is low. And certainly, if your governance is low, your returns on investment and stuff like that would be low as well,” Ade-Odiachi said.

He emphasised that strong ESG performance is crucial for attracting foreign direct investment, which offers cheaper, longer-term capital compared to portfolio investors who are less concerned about sustainability.

“The people who would enable us to grow sustainably are foreign direct investors. And those pay a lot of attention to critical issues like ESG and how you govern yourself, and the kind of returns you produce, how sustainably profitable you are.”
The IPMC chairman also criticised regulators for weak oversight, questioning the effectiveness of multiple state-level ESG bodies and national regulators such as the Securities and Exchange Commission (SEC), Nigerian Exchange Limited (NGX), Financial Reporting Council (FRC) and the Central Bank of Nigeria (CBN).

“Global rating agencies have almost no data on Nigerian companies. Go to the Carbon Data Project or Sustainalytics—Nigeria is scarcely represented. This gap continues to limit the flow of critical investment into the country,” he said.
The report further revealed that only five per cent of the companies assessed met average ESG performance thresholds, with an equal percentage classified as having robust frameworks. Head of Data Collection at IPMC, Yusuf Suleiman, described the findings as “a huge blow to Nigeria,” attributing the poor outcomes to regulatory lethargy and weak corporate commitment.

“International investors are willing to invest in ESG-compliant companies. Our findings show that most Nigerian firms are not compliant, and regulators must do more to enforce standards,” he said.
In his opening remarks, IPMC’s Business Manager, Abimbola Gbenjo, said ESG principles are reshaping global markets and influencing how investors allocate capital. He added that Nigeria, as Africa’s most populous country, has an essential role in the region’s sustainability transition.

He also highlighted the vast investment capital available for ESG-aligned companies, noting that over $1.3 trillion in global climate funding is currently being mobilised at the COP summit in Brazil.

The report urged companies to strengthen their ESG systems by moving from “policy to proof,” seeking independent assurance for disclosures, and improving transparency. It also called on regulators to harmonise frameworks and mandate assurance to bridge Nigeria’s widening credibility gap with regional peers.