NGX RegCo urges stakeholders to adopt ESG framework
Nigerian Exchange Regulation (NGX RegCo), has urged public and private stakeholders to urgently prioritise the implementation of key national and global Environmental, Social, and Governance (ESG) related regulations.
This call to action was made at the 16th yearly International Business Law Conference, themed “Recent Developments in the Business Law Environment”, hosted by the Nigerian Bar Association Section on Business Law (NBA-SBL) at Transcorp Hilton Hotel Abuja.
Speaking during a panel discussion focused on ‘ESG and the Nigerian Business Environment’, NGX RegCo Chief Executive Officer (CEO), Ms. Tinuade Awe said companies that successfully incorporate ESG frameworks into their business operations are considered responsible corporate citizens. She said such companies can mitigate operational risks, attract sustainable investors, and generate long-term value.
She noted that prioritising the implementation of key national and global ESG-related regulations will improve Nigeria’s ESG performance and reputation on the global stage. Awe said it would also guarantee its contribution to the global development agenda such as the United Nations Sustainable Development Goals (SDGs) and the Paris Agreement.
According to her, the rapidly evolving global ESG landscape requires a deliberate partnership between Nigerian public and private sector stakeholders to embrace their responsibility and help create a sustainable future.
She said this could be achieved by ensuring that their approach to addressing ESG-related risks and opportunities as well as their contribution towards sustainable development is done in a more transparent manner.
Awe stressed the need for the Nigerian government to adopt initiatives that accelerate progress towards mandatory reporting on key ESG-related issues and climate-related reporting.
“These initiatives would ensure private and public sector companies become cognisant of global trends on climate-related reporting in line with leading guidance frameworks such as the Task Force on Climate-related Financial Disclosures (TCFD) recommendations as well as the International Sustainability Standards Board (ISSB) which has recently developed a comprehensive set of guidelines on general sustainability and climate-related disclosures to improve the availability of standardised, decision-useful non-financial data for the investment decision-making process”.
Concerning NGX RegCo’s contribution to the development and implementation of ESG regulation in Nigeria, Awe cited the 2019 NGX Sustainability Disclosure Guidelines, which provide issuers with a step-by-step approach to integrating sustainability in their organisational activities and operations.
She pointed out that these guidelines also provide guidance on best practice sustainability reporting that comply with global standards including the Global Reporting Initiative (GRI).
Furthermore, Awe noted that the NGX RegCo also played a leading role in developing the regulation for Nigeria’s green bond market and other sustainable financial products that address environmental and social challenges affecting Nigeria along with the Federal Ministry of Environment, Nigerian Exchange Limited and other industry stakeholders.
Awe pointed out that this was done in recognition of the climate finance needs particularly in Nigeria, stating that urgent action was required to combat climate change as enshrined in the Paris Agreement on Climate Change, and the efforts culminated in the issuance of the maiden N10.69 billion(c. $25.8 million) 13.48 per cent five-year green bond in 2017.
Additionally, Awe stated that NGX RegCo is working with NGX to develop a dedicated set of climate disclosure guidelines that will address climate change-related issues and serve as a complementary set of guidelines to the NGX sustainability disclosure guidelines.
According to her, these guidelines, which will be developed in line with the TCFD recommendations, are currently in their formative stage. She added that the zero drafts will be published in a few months while public consultations for feedback are expected to follow afterwards.
“NGX RegCo continues to promote sustainable business practices in Nigeria’s Capital Market by encouraging listed companies to adopt the best national and global ESG regulations. “