Governments and their appointed regulatory bodies are fast recognizing the importance of sustainability and responsible business practices across the world and Nigeria is not an exception. In recent years, Nigeria has made some remarkable strides in acknowledging the importance of sustainability with the introduction of some legislative provisions, establishment of agencies amongst other actions.
In line with the Paris Agreement signed in 2015 and the Nationally Determined Contribution (NDC) submitted by Nigeria to the United Nations Framework Convention on Climate Change (UNFCCC), Nigeria pledged to reduce its greenhouse gas emissions by 20% by 2030. As a signatory to various international agreements and accords that are focused on climate change and environmental conservation, the country is expected to convert its commitments into actionable policies in the coming years.
In this article, we explore the sustainability trends in Nigeria over the years and our outlook for 2024.
Sustainability trends over the years
Nigeria, aligning with global imperatives, has demonstrated a committed stance towards addressing climate change and fostering sustainability. Recognizing the demand for transparency in reporting climate and sustainability risks from investors, the Nigeria Exchange Group (NGX) unveiled the “Sustainability Disclosure Guidelines” on 9 November 2018 following an approval from the Securities and Exchange Commission (SEC). These guidelines mandate publicly listed companies to present their sustainability performance in their annual reports.
The SEC in April 2021 issued the “Guidelines on Sustainable Financial Principles for the Nigerian Capital Market” which introduced a comprehensive framework aimed at integrating Environmental, Social, and Governance (ESG) considerations into the nation's capital market. The SEC guidelines align with global trends, recognizing the potential of sustainable practices to save costs, drive revenue growth, and reduce reputational risks. As Nigeria continues to apply these principles, it positions itself for sustainable finance, demonstrating a commitment to balancing economic prosperity with environmental protection and social development.
As part of Nigeria's dedication to the decarbonisation journey, Nigeria also enacted the Climate Change Act in 2021 to provide a functional framework for mainstream climate change management at a national level. The Act prioritizes the development of robust climate change mitigation and adaptation strategies with the goal of seamlessly integrating climate change actions into national development priorities and fostering a cohesive approach to environmental stewardship.
In 2022, Nigeria launched an Energy Transition Plan (ETP), designed to simultaneously tackle the challenges of energy poverty and the climate change crisis. The ETP lays out a plan for reaching the country's goal of Net Zero emission by 2060. The ETP seeks to lift over 100 million people out of poverty by driving economic growth, connecting the population to modern energy services, and managing the potential job losses in the oil sector because of global decarbonisation.
This approach solidifies Nigeria's position in sustainability reporting, setting the stage for a transformative outlook in 2024. With a robust framework in place, the nation anticipates continued strides towards environmental stewardship, corporate responsibility, and the realization of ambitious emission reduction goals. As Nigeria moves forward, it exemplifies a commitment to sustainable practices, contributing to the global discourse on responsible and transparent business conduct.
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