IFRS Report: Nigerian Companies among Corporates Making Progress on Climate-related

DisclosuresDike Onwuamaeze

Ten Nigerian companies are among the corporate entities in the world that have continued to make progress in their climate-related disclosures and are preparing to make the transition from disclosures prepared using the TCFD recommendations to disclosures prepared using ISSB Standards.
This was disclosed in the, “Progress on Corporate Climate-related Disclosures—2024 Report,” prepared by the IFRS Foundation, which reviewed 113 companies in 13 jurisdictions that are headquartered in Africa included.
It stated that the review of reporting by companies in Africa for fiscal years 2022 and 2023 showed an increase in or nearly consistent levels of disclosures for all TCFD recommended disclosures.
“In Africa, out of the 80 companies that referenced the ISSB, more than 50 per cent mentioned current or future alignment in reporting with the sustainability-related disclosure requirements in ISSB Standards,” the report said.
According to the report, three jurisdictions with the largest number of companies reviewed were South Africa (69 companies), Nigeria and Egypt (10 companies in each).  
Other jurisdictions in Africa whose companies were reviewed were Zambia 3, Botswana 2, Ghana 2, Kenya 7, Mauritius 2, Morocco 3 and Zimbabwe 2. In addition, there was one company each from Sudan, Togo and Uganda.
The report stated that companies in the materials and buildings had the highest rates of reporting on climate-related metrics at 73 per cent, GHG emissions at 81 per cent and lower rates of reporting on climate-related targets at 62 per cent, while banking and insurance industries had comparatively similar levels of reporting aligned with the TCFD recommendations—these companies reported on average on 5.3 and 4.8 out of 11 recommended disclosures.
These three industries also had the highest rates of reporting on all 11 recommended disclosures, respectively (see Table 1.13). Specifically, insurance companies had the highest levels of reporting on board oversight and climate-related targets—at 80 per cent and 70 per cent.
Companies in the transportation industry, on average, reported in line with one of the 11 recommended disclosures.
There was no reporting on five of the 11 recommended disclosures for the transportation industry (see Table 1.13).
The lowest level of reporting in each of the industries was on resilience of the company’s strategy under different climate-related scenarios (Strategy c).
In fact, none of the reviewed insurance, transportation or consumer goods companies reported in line with Strategy.
The reported noted that the Financial Reporting Council of Nigeria (FRC)  phased the implementation of TCFD-aligned disclosure requirements in three stages: FY 2024—companies are permitted to use ISSB Standards; FY 2028—all public interest entities except government and government organisations;FY 2030—small and medium-sized entities.
It added that the FRC has issued a roadmap for the adoption of ISSB Standards and has amended the Financial Reporting Act to reflect the application of ISSB Standards.  
“In March 2024 the Adoption Readiness Working Group of Nigeria, under the leadership of the FRC, introduced a roadmap for the adoption of ISSB Standards.
“The roadmap describes four phases of adoption, starting with voluntary adoption by all groups of Nigerian reporting entities from fiscal year 2024.

“Public interest entities, except government and government organisations, will be required to apply ISSB Standards from fiscal year 2028, with requirements extending to SMEs in fiscal year 2030,” the report said.