FRC Tasks Telecoms, Oils and Gas Operators on Sustainability Reporting

Dike Onwuamaeze

The Executive Secretary/Chief Executive Officer of Financial Reporting Council of Nigeria (FRC), Dr. Rabiu Olowo, has enjoined operators in the oil and gas and telecommunications industries to embrace sustainability reporting as way to demonstrate their commitment toward responsible corporate principles, sustainable practices, risk management and sustainable finance opportunities.

Olowo made this call yesterday in Lagos during the “Awareness Workshop on the Implementation of ISSB’s IFRS S1& S2 for Oil and Gas/Telecommunications Industries.”

According to him, sustainability reporting is the practice of organisations disclosing their environmental, social, and governance (ESG) performance and impacts caused by their everyday activities.

He said: “It is a disclosure to the various stakeholders on the impact of ‘action taken in the present has upon the options that are available in the future.’

“For oil & gas and telecoms institutions, sustainability reporting is crucial as it enables them to demonstrate their commitment towards responsible corporate principles, sustainable practices, risk management and sustainable finance opportunities.

“Globally, sustainability reporting is crucial for the oil and gas industry as it faces increasing pressure to address environmental and social concerns.”

Olowo said that oil and gas industry’s operations have significant impacts on the environment, including greenhouse gas emissions, oil spills, and habitat destruction.

According to him, “sustainability reporting allows oil and gas companies to transparently disclose their sustainability performance, progress towards reducing their environmental footprint, and efforts to mitigate climate change.

“This transparency builds trust with stakeholders, including investors, customers, and regulators, and helps companies identify areas for improvement and innovation.

“Moreover, sustainability reporting enables oil and gas companies to demonstrate their commitment to responsible business practices and contribute to the global transition to a low-carbon economy.”

For the telecoms industry, Olowo said that sustainability reporting is essential for managing the environmental and social impacts of its operations and products.

He said: “The industry’s growing demand for energy, e-waste generation and supply chain risks necessitate responsible management practices.

“Sustainability reporting enables telecoms companies to disclose their sustainability performance, including energy efficiency, renewable energy usage, and e-waste reduction initiatives.

“This transparency helps telecoms companies identify areas for improvement, reduce costs, and capitalise on opportunities for innovation and growth.

“Furthermore, sustainability reporting allows telecoms companies to demonstrate their commitment to sustainable development and contribute to the achievement of the United Nations’ Sustainable Development Goals (SDGs), such as SDG 9 (Industry, Innovation, and Infrastructure) and SDG 12 (Responsible Consumption and Production).”

He argued that the impending negative effect of climate change required that everyone should act, “and it is therefore not a business decision or a nice to have.  It is a compliance issue, which every company is expected to comply by default through cultural behaviour.”

In his remarks during the workshop, the Chief Executive Officer of NGX Regulations Limited, Mr. Olufemi Shobanjo, said that the implementation of the ISSB’s first two IFRS Sustainability Disclosure Standards, better known as IFRS S1 is a pivotal moment that marked a significant step toward enhancing transparency, accountability, and sustainability in our industries.

According to Shobanjo, the oil and gas industry is at the forefront of the global transition towards sustainable energy and by implementing IFRS S1 and S2, companies in the sector would better articulate their environmental impact, strategies for managing climate-related risks, and progress toward sustainability goals.

He said: “Similarly, given the high levels of greenhouse gas emitted in the telecommunications industry, companies in this sector are not left out of the need to transition toward adopting sustainable practices and operations.

“Therefore, the transparency required of both sectors is not only essential for regulatory compliance, but also for maintaining investor confidence and securing funding for sustainable initiatives.

“We note that many organisations are now taking a pro-active approach by putting in place strategies to achieve net-zero emissions and have set targets to reduce the carbon intensity of the energy products they sell.

“Some are also on their way to developing individualized project zero strategies to meet net-zero and greenhouse gas emissions targets by specific timelines. 

“As we adopt these standards, we can demonstrate our commitment to responsible practices, including energy efficiency and reducing carbon footprints, we are confident that enhanced disclosures would attract environmentally conscious investors and align our operations with global sustainability trends.”

A former President of the Institute of Chartered Accountants of Nigeria, Dr. Innocent Okwuosa, described sustainability reporting as a journey that has started which every Public Interest Entities (PIEs) should embark on.

Okwuosa said that the FRC and the Nigeria Integrated Reporting Committee has to come together to ensure “a seamless implementation journey.”

He, therefore, tasked firms in the oil and gas as well as telecommunications industries to embrace responsible business behaviour, which sustainability reporting is all about.