‘Unified ESG regulation needed to enhance compliance’

Chief Executive Officer of the Nigerian Exchange Limited Regulation (NGX RegCo), Olufemi Shobanjo, has stressed the need for the establishment of a unified ESG regulatory body to enhance industry-wide compliance.

At the Financial Institutions Training Center (FITC) Sustainability ESG Summit 2024, themed: ‘From Vision to Action – Leading with Sustainability and ESG: Building a Sustainable Future and Green Finance,’ Shobanjo said such an entity is crucial to streamline and enforce compliance across industries.

During the panel discussion, Shobanjo lauded the FITC Board and Management, particularly Phillip Ikeazor and Chizor Malize, for their pioneering launch of the ESG Sustainability Institute. According to him, this initiative has created a vital platform for advancing and discussing sustainability practices.

Citing EcoTech Solutions, a local company that successfully embraced sustainability and implemented comprehensive ESG practices, Shobanjo said the implementation led to reduced costs, enhanced brand reputation, and substantial growth in their profitability.

Addressing the regulatory landscape, Shobanjo noted that Nigeria’s existing laws, such as the Climate Change Act and the Federal Competition, as well as the Consumer Protection Act, offer a solid framework for tackling environmental and social issues.

He lamented that while the financial services sector has made strides with initiatives like the Nigerian Sustainable Banking Principles, other sectors are lagging.

Shobanjo said the establishment of a unified ESG regulatory body would ensure consistent compliance across all industries and enable companies to align with national and global ESG standards.

He pointed out that this approach would enhance transparency and accountability, as well as position Nigeria as a leader in global ESG performance.

He also underscored the role of innovative technologies in sustainable finance, noting that with the introduction of NGX INVEST, NGX RegCo’s new digital platform, the organisation is advancing paperless subscriptions and making green finance more accessible.

“Technologies such as blockchain, big data and fintech are also revolutionizing sustainable finance by improving transparency, optimising investment decisions, and broadening access to green investments.”

He urged managers to integrate sustainability into their business by adopting ESG principles and leveraging innovative technologies, companies to drive significant change and contribute to a sustainable future.

According to him, commitment to these practices is essential for fostering a resilient and prosperous economy.

He also reaffirmed NGX RegCo’s dedication to promoting a responsible and sustainable market environment, while expressing optimism for a sustainable future for all.