NGX Regulation Limited (NGX RegCo) has emphasized the importance of seeking expert guidance and systematically monitoring Environmental, Social, and Governance (ESG)-related data for accurate reporting. This practice is crucial for promoting the swift adoption of ESG reporting among companies listed on the NGX.
Tinu Awe, the CEO of NGX RegCo, shared this perspective during a Roundtable discussion titled “ESG Activity Reporting and Sustainable Investing” at the Africa Social Impact Summit 2023 in Lagos. Awe highlighted the significance of integrating ESG factors into financial reporting and stressed that businesses pursuing ESG reporting should align their strategy with their business objectives.
Awe underscored that companies successfully incorporating ESG reporting into their operations are seen as responsible corporate entities. Such companies are better equipped to manage operational risks, attract sustainable investors, and generate long-term value.
Awe revealed that around 50% of listed companies on NGX have fully integrated sustainability reporting into their annual reports or have released dedicated standalone reports. She also emphasized that adopting ESG reporting practices can enhance Nigeria’s global reputation in terms of ESG performance. Awe encouraged corporate entities to embrace ESG reporting as a contribution to Nigeria’s goal of achieving carbon neutrality by 2060.
When addressing potential penalties for companies failing to adopt ESG reporting, Awe explained that NGX has sustainability disclosure guidelines in place since 2019. However, she mentioned that these guidelines will be reviewed in alignment with emerging International Sustainability Standards Board (ISSB) Standards and evolving global ESG expectations.
Opinion:
The emphasis on expert guidance and data monitoring for ESG reporting highlights the growing recognition of sustainability as a critical factor in business operations. By aligning ESG strategies with business goals, companies can not only fulfill their corporate social responsibilities but also enhance their operational resilience and attractiveness to investors. Aligning ESG strategies with business goals enhances resilience and investor appeal.