The Financial Reporting Council (FRC) of Nigeria, International Sustainability Standards Board (ISSB), and NGX Regulation Limited (NGX RegCo) jointly announced the launch of the first two International Financial Reporting Standards (IFRS) Sustainability Disclosure Standards (IFRS S1 and IFRS S2 Standards) on Monday, June 26. With this launch, Nigeria becomes the first African country to adopt these standards, which were also simultaneously launched in major global financial centers, including New York, London, Frankfurt, Singapore, Santiago, and Montreal.
The objective of implementing these standards is twofold: to empower investors in making informed investment decisions and to encourage companies to embrace sustainability as an integral part of their financial reporting. The launch event took place at the Nigerian Exchange Group House in Lagos.
Shuaibu Adamu, Executive Secretary of the FRC, expressed his pride in this historic milestone for Nigeria. He emphasized that the adoption of these standards showcases Nigeria's steadfast commitment to responsible and sustainable business practices. Adamu further stated that by embracing these standards, Nigeria sets an influential example for other nations and reinforces its position as a global leader in sustainability reporting.
Adamu also highlighted the significance of attracting private investment capital, emphasizing the growing global investor base focused on environmental, social, and governance (ESG) factors, which now amounts to over $2 trillion in institutional investor funds under management. He emphasized that Nigeria must compete with other nations to attract this private capital, and comprehensive, transparent information about sustainability and climate-related risks and opportunities is essential for appropriately pricing these factors and unlocking the necessary capital flows.
Tinuade Awe, CEO of NGX RegCo, also underscored the importance of the launch for the growth of Nigeria's capital market. She noted that companies in Nigeria will now have a global baseline to follow, providing a level playing field. Awe called for a focus on the forthcoming standards, reiterating NGX RegCo's commitment to fostering a fair, transparent, and orderly market that thrives on full and timely information to protect investors in Nigeria's capital market.
The adoption of the IFRS Sustainability Disclosure Standards marks a significant step towards enhancing transparency, accountability, and sustainability in Nigeria's corporate landscape. It is expected to boost investor confidence, attract private capital, and contribute to the country's broader sustainable development goals.
