ISSB-Aligned Sustainability Disclosures to Boost Nigeria’s Capital Market, Lower Costs, and Attract Global Investors
The Securities and Exchange Commission (SEC) has announced that adopting the International Sustainability Standards Board (ISSB) disclosure framework will significantly reduce information risk, lower capital costs for Nigerian companies, and attract global investors. Speaking at a panel on IFRS S1 and S2 standards, SEC Director-General Emomotimi Agama emphasized that aligning Nigeria’s capital markets with global sustainability standards is key to boosting investor confidence and integrating the country into international financial markets.
Agama explained that the new disclosure framework will provide clear, comparable, and decision-useful information for investors, helping companies manage risks, strengthen cash flow resilience, and execute sustainability transition strategies. He added that these disclosures are expected to lower perceived risks, reduce borrowing costs, and expand access to a broader pool of international capital, particularly from institutional investors and development finance institutions.
The SEC has developed a phased implementation roadmap for the ISSB standards. Large public interest entities (PIEs) and early adopters will begin voluntary reporting, while mandatory adoption will start in 2027 for significant PIEs, extend to other PIEs in 2028, and reach small and medium enterprises by 2030. To support smooth adoption, the SEC is collaborating with the Financial Reporting Council of Nigeria (FRCN), Nigerian Exchange Limited (NGX), and other market stakeholders to harmonize ESG reporting and introduce digital, machine-readable reporting systems.
Agama highlighted that the SEC will initially use a review-based supervisory approach with a “comply or explain” regime, gradually moving to full enforcement once companies build preparer and assurance capacity. He noted that full ISSB adoption will stimulate innovative financial products such as green bonds, sustainability-linked bonds, and transition sukuk, diversifying Nigeria’s capital market and improving its eligibility for major global indices.
Dr. Rabiu Olowo, Executive Secretary of the FRC, stressed that ISSB standards are crucial for achieving global consistency in sustainability reporting. He added that transparency, reliability, and comprehensive sustainability information are increasingly demanded by investors, regulators, and the public. Both regulators agreed that embedding sustainability into Nigeria’s capital markets would enhance market credibility, deepen investor trust, and support inclusive economic growth, particularly for small and medium enterprise
source: the sun