Nigeria launches roadmap for adoption of Sustainability Financial Reporting Standard
The Financial Reporting Council of Nigeria (FRCN), supported by NGX Regulation Ltd. (NGX RegCo), launched the roadmap for the adoption of the Sustainability Financial Reporting Standard in Nigeria on Friday.
Consequently, Nigeria became the first country in Africa to launch the International Sustainability Standards Board (ISSB) sustainability financial reporting standard.
IFRS Sustainability Standards are developed to enhance investor-company dialogue.
It also enables investors to receive useful decision-making and globally comparable sustainability-related disclosures that meet their information needs.
The roadmap for the adoption of the reporting standard was launched at a session with the Chairman of ISSB/IFRS Foundation, Mr Emmanuel Faber, organised by FRCN and NGX RegCo in Lagos.
In his address, Mr Rabiu Olowo, Chief Executive Officer of FRCN, said that the launch of the roadmap asserted Nigeria’s leadership role in the adoption of the ISSB’s sustainability standard.
Olowo revealed that President Bola Tinubu in Abuja had earlier expressed affirmation in his commitment to the adoption of ISSB’s proposition and framework for the sustainability standard in Nigeria during a visit of the board’s team to the Presidency.
He explained that the unveiling of the roadmap was in line with ISSB’s launch of its two inaugural sustainability standards, namely; IFRS S1, for disclosure of sustainability-related financial information, and IFRS S2 for climate-related disclosure in June 2023.
According to him, the FRCN also issued the exposure draft on the roadmap for sustainability reporting in Nigeria on Feb.1, while the period of exposure ended on March 14.
Olowo said that the sustainability financial reporting standard unlocked capital flow and improved transparency across value chains, leading to greater and healthier competitiveness for companies.
He noted that the financial reporting standard also led to increased Foreign Direct Investments (FDIs), portfolio investment, job creation, and promoted economic and social resilience, in line with the economic policies of the present government.
The FRCN boss said the visit of Faber to Nigeria underscored the importance the country attaches to aligning with the global framework, especially as it affects corporate practices, of which sustainability had become a critical component.
“This event is the third in Nigeria’s sustainability journey and signifies a remarkable one, following the unveiling of the roadmap for sustainability reporting in Nigeria.
“The visit of Emmanuel Faber and his team is not only a testament to Nigeria’s support of the ISSB but also an encouragement to all stakeholders.
“Nigeria has become a good reference point globally, which has good practice to be emulated,” he said.
Olowo appreciated the Adoption Readiness Working Group (ARWG) and other stakeholders for coming together to build the framework that would help the country onto its journey of sustainability financial reporting standard.
According to him, the roadmap for the implementation of the sustainability standard reporting is in different phases, between 2024 and 2030, for big and small businesses in the area of sustainability reporting and assurance of timeline.
Olowo assured that FRCN would provide resources and support for the seamless transition into the new financial reporting through advocacy, technical support, capacity building, training for easy preparation of financial reports to attract investors’ confidence in businesses.
In a session, Mr Emmanuel Faber, Chairman of ISSB, commended the FRCN, NGX RegCo, and other working team members for their hard work that led to the adoption roadmap for the Sustainability Financial Reporting Standard in Nigeria.
Faber stated that financial reporting must encompass sustainability standards, which address climate change and transition risk, which are inevitable for businesses and the nation.
He explained that accounting does not consider long-term national assets, human capital, and other aspects of resilience of macro-economic models and micro-economic business models, which sustainability standard covers.
“If accounting really envisages, the naira will not be sitting where it is because investors, credit rating, banks, and many financial operators would look through the current challenges into the incredible richness of Nigeria’s human and natural capital and resources,” he said.
According to him, the ISSB sustainability financial reporting standard would help Nigeria community and corporations to become the most transparent and credible in supply chains and before investors, using appropriate metrics.
Faber pledged that the ISSB would fully support Nigeria in the implementation of the roadmap of the sustainability standard to build a business model for a more resilient and economic stability.
In his remark, the Chief Executive Officer of NGX RegCo, Mr Femi Shobanjo, appreciated ISSB under the leadership of Faber for the effort to ensure that the adoption of the Sustainability Financial Reporting Standard was a huge success in Nigeria.
Shobanjo said that the event was historical and signified a new dawn in Nigeria’s sustainability journey.
He expressed optimism that all financial market stakeholders would remain committed to good corporate governance practices and abide by the rules of NGX and other extant laws in the country.
Also, the President of the Institute of Chartered Accountants of Nigeria, Dr Innocent Okwuosa, lauded the relief brought by the sustainability financial standard reporting when compared to IFRS.
Okwuosa, also President of Nigeria Integrated Reporting Committee (NIRC), said that while the FRCN had put in place mechanisms to ensure that the country get the implementation of the financial standard right, it was important to ensure that the capacity of the implementation remained effective.
The event closed with a closing gong of the Nigerian Exchange Ltd (NGX) stock market by Faber, supported by Olowo and other officials of ISSB, FRCN, and NGX.
