Olowo: Sustainability Reporting Gaining Traction as Listed Companies Lead Adoption

James Emejo in Abuja

Executive Secretary/Chief Executive, Financial Reporting Council (FRC) of Nigeria, Dr. Rabiu Olowo, said the country has moved through the early adoption stage of the International Financial Reporting Standard (IFRS S1 & S2), stating that some listed entities have demonstrated leadership in reporting their sustainability-related risks and opportunities.

Speaking at the opening of the Regulatory Roundtable on the Implementation of ISSB’s Sustainability Standards in Nigeria, which was organised by the council in Abuja, he said both Access and Fidelity Banks, Seplat Energy and mobile telecommunications giant, MTN remained a few companies that had started to comply with the new sustainability standards.

He said, “We have now entered the voluntary stage, which will run from 2024 to 2027, serving as a learning curve in preparation for the mandatory period beginning in 2028.”
Olowo said the disclosure standards could unlock capital investments, safeguard the environment for future generations.
He said the roundtable was both timely and significant as the FRC embarks on an essential mission to embed sustainability reporting into the core of the country’s business practices.

He said Nigeria had taken a pioneering role by adopting the ISSB standards, positioning it as a leader in Africa, adding that collaboration was crucial for ensuring successful implementation of these standards.
Olowo said the ISSB framework offered a groundbreaking approach for organisations to disclose climate-related risks and opportunities, enhancing transparency, consistency, and informed decision-making.

He said by embracing these standards, “we can unlock capital investments, stimulate innovation, and safeguard our environment for future generations.”
According to him, the ISSB standards provide a global baseline for sustainability reporting, promoting comparability, transparency, and accountability-qualities that have often been lacking in the past.

He stressed that previously, sustainability reporting was marred by a lack of these characteristics, with entities reporting only what was normative to them, rather than adhering to prescriptive best practices.
According to him, this often led to reports that lacked the rigor and transparency expected of general-purpose financial reporting.
On the milestones so far achieved towards the adoption of the new standards, the FRC boss said, “We have recently moved through the Early Adoption Stage, with some listed entities demonstrating leadership in reporting their sustainability-related risks and opportunities using IFRS S1 and IFRS S2.

“Notable examples include Access and Fidelity Banks in the financial services sector, Seplat Energy in the oil and gas sector, and MTN in the telecommunications industry. We have now entered the voluntary stage, which will run from 2024 to 2027, serving as a learning curve in preparation for the mandatory period beginning in 2028.”

He said, “As we advance, it is crucial to encourage industry-wide participation and foster a collective commitment to sustainability reporting. By monitoring progress and sharing best practices, we can identify areas for improvement, celebrate successes, and drive continuous enhancement.

“Through our collaborative efforts, we can create a robust ecosystem that supports organizations in adopting sustainability reporting, ultimately contributing to a more resilient and sustainable future for Nigeria.”

The FRC boss said the country’s vision to achieve compliance with the disclosure standards cannot be realised in isolation.

He said, “As regulators, your influence spans across industries, and your endorsement will encourage widespread adoption. To successfully integrate sustainability reporting into our nation’s business practices, we must cultivate a culture that prioritizes transparency, accountability, and environmental stewardship.

“This can be achieved by developing comprehensive guidance and resources that facilitate the seamless implementation of ISSB standards, empowering organisations to confidently disclose climate-related risks and opportunities.

“As we advance, it is crucial to encourage industry-wide participation and foster a collective commitment to sustainability reporting. By monitoring progress and sharing best practices, we can identify areas for improvement, celebrate successes, and drive continuous enhancement.

“Through our collaborative efforts, we can create a robust ecosystem that supports organisations in adopting sustainability reporting, ultimately contributing to a more resilient and sustainable future for Nigeria.”

Essentially, IFRS S1 applies to sustainability-related financial disclosures while IFRS S2 Climate-related Disclosures sets out specific climate-related disclosure requirements for a company to disclose information about its climate-related risks and opportunities.