Climate Disclosure Guidelines for Nigerian Stock Market Underway
By Dipo Olowookere
The Nigerian Exchange Regulation (NGX RegCo) is working closely with its sister organisation, the NGX Limited, to design a dedicated set of Climate Disclosure Guidelines that will address climate change-related issues and serve as a complementary set of procedures to the NGX Sustainability Disclosure Guidelines.
The chief executive of NGX RegCo, Ms Tinuade Awe, dropped this hint recently at the 16th Annual International Business Law Conference hosted by the Nigerian Bar Association Section on Business Law (NBA-SBL) in Abuja.
At the event themed Recent Developments in the Business Law Environment, she said the rules, which will be developed in line with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations, are currently in their formative stage, adding that the zero drafts would be published in a few months and public consultations for feedback to follow afterwards.
The capital market expert, who was speaking on ESG and the Nigerian Business Environment during a panel discussion, used the occasion to appeal to the public and private stakeholders to urgently prioritise the implementation of key national and global Environmental, Social, and Governance (ESG) related regulations.
According to her, prioritising the implementation of key national and global ESG-related regulations will improve Nigeria’s ESG performance and reputation on the global stage and guarantee its contribution to the global development agenda such as the United Nations Sustainable Development Goals (SDGs) and the Paris Agreement.
“The rapidly evolving global ESG landscape requires a deliberate partnership between all Nigerian public and private sector stakeholders who must embrace their responsibility to help create a sustainable future by being transparent in their approach to addressing ESG-related risks and opportunities, and their contribution towards sustainable development,” she added.
Ms Awe charged the Nigerian government to adopt initiatives that accelerate progress toward mandatory reporting on key ESG-related issues as well as climate-related reporting.
“These initiatives would ensure private and public sector companies become cognizant of global trends on climate-related reporting in line with leading guidance frameworks such as the TCFD recommendations as well as the International Sustainability Standards Board (ISSB) which has recently developed a comprehensive set of guidelines on general sustainability and climate-related disclosures to improve the availability of standardized, decision-useful non-financial data for the investment decision-making process,” she stated.
Concerning NGX RegCo’s contribution to the development and implementation of ESG regulation in Nigeria, she cited the 2019 NGX Sustainability Disclosure Guidelines which provide issuers with a step-by-step approach to integrating sustainability in their organisational activities and operations.
“These guidelines also provide guidance on best practice sustainability reporting that comply with global standards including the Global Reporting Initiative (GRI),” Ms Awe said, noting that “NGX RegCo also played a leading role in developing the regulation for the development of Nigeria’s green bond market and other sustainable financial products that address environmental and social challenges affecting Nigeria along with the Federal Ministry of Environment, NGX Limited and other industry stakeholders.
“This was done in recognition of the climate finance needs particularly in Nigeria, and the urgent action required to combat climate change as enshrined in the Paris Agreement on Climate Change, and the efforts culminated in the issuance of the maiden N10.69 billion ($25.8 million) 13.48% 5-year green bond in 2017.”