‘ESG Compliance Critical to Attracting Investments in Capital Market’

Kayode Tokede

The Divisional Head, Capital Markets at Nigerian Exchange Limited (NGX), Jude Chiemeka, has highlighted the importance of Environmental, Social, and Governance (ESG) compliance and the democratisation of data in attracting investments and enhancing stock liquidity in the Nigerian capital market.

Chiemeka shared this during a panel session titled, “ESG and Sustainable Finance; The Future of Investments,” which was jointly organised by the Securities and Exchange Commission (SEC) and the Financial Centre for Sustainability in Lagos yesterday.

Whilst noting that NGX is a member of the Sustainable Stock Exchanges Initiative, Chiemeka emphasized the Exchange’s strong focus on technology, which facilitates investor access to essential data. According to him, seamless access to various products in the capital market is crucial, especially for retail investors.

Furthermore, Chiemeka offered advice to investors, urging them to consider companies that are ESG-compliant and provide transparent and high-quality disclosures. He stressed the significant correlation between ESG disclosures and corporate performance. “Companies on the Exchange that demonstrate strong ESG compliance often gain access to more capital, attract a broader investor base, and can even raise capital from foreign markets. The NGX Premium Board features companies that adhere to international best practices on corporate governance and meet NGX’s highest standards of capitalization and liquidity. Compliance is not only a matter of prestige but also an indicator of sustainable growth, making these companies more appealing to both international and domestic investors”.

Chiemeka also commended the SEC for its efforts in establishing a sustainable finance framework, especially in regards to green bonds. “Nigeria’s issuance of a green bond solidified its position as the first sovereign country in Africa to do so, and we applaud the SEC’s role in making this possible”, he said.