NGX RegCo, FRCN Unveil Roadmap for SFRS Adoption

The NGX Regulation Ltd. (NGX RegCo), the regulating body of the Nigerian Exchange Group and Financial Reporting Council of Nigeria (FRCN), at the weekend, jointly launched the roadmap for the adoption of the Sustainability Financial Reporting Standard in Nigeria.

This significant initiative was marked by a regulatory roundtable event, coinciding with the visit of Mr. Emmanuel Faber, Chair of the International Sustainability Standards Board (ISSB), and his team to the Nigerian Exchange.

Speaking during the event, the Chief Executive Officer, NGX RegCo, Femi Shobanjo commended the ISSB for their efforts in ensuring the successful adoption of the Sustainability Financial Reporting Standard in Nigeria.

He emphasized the historical significance of this event, marking a new chapter in Nigeria’s sustainability journey. Shobanjo reiterated NGX RegCo’s commitment to promoting fair and transparent markets, emphasizing the importance of timely information disclosure for investor protection.

He expressed optimism that all financial market stakeholders would remain committed to good Corporate Governance Practices and abide by the rules of NGX and other extant laws in the country.

According to him, “signaling progress in our sustainability journey as a nation, today’s noteworthy event will launch the roadmap on address adoption of the issues sustainability disclosure standards and touching upon strategic developments in the field of sustainability reporting, as well as the importance of the standards and supporting investors and meeting the capital needs to unlock capital flows into Africa.”

The Chief Executive Officer, FRCN, Mr Rabiu Olowo said that the launch of the roadmap asserts Nigeria’s leadership role in the adoption of the ISSB’s sustainability standard.

Olowo revealed that President Bola Tinubu during a visit of the ISSB’s team to him in Abuja earlier, expressed affirmation in his commitment for the adoption of ISSB’s proposition and framework for the sustainability standard in Nigeria.

He explained that the unveiling of the roadmap, is in line with ISSB’s launch of its two inaugural sustainability standards, namely; IFRS S1, for disclosure of sustainability related financial information and IFRS S2 for climate related disclosure in June 2023.

According to him, the FRCN also issued the exposure draft on the roadmap for sustainability reporting in Nigeria on Feb.1, which period of exposure ended on March 14.

Olowo said that sustainability financial reporting standard unlocks capital flow, improves transparency across value chains, leading to greater and healthy competitiveness for companies.

He noted that the financial reporting standard also leads to increase Foreign Direct Investments (FDIs), portfolio investment, job creation, promote economic and social resilience, in line with the economic policies of the present government.

The FRCN boss said the visit of Faber to Nigeria underscores the importance Nigeria attaches in aligning with global framework, especially as it affects corporate practices, of which sustainability has become a critical component.

Olowo appreciated the Adoption Readiness Working Group (ARWG) and other stakeholders for coming together to build the framework that would help the country unto its journey of sustainability financial reporting standard.

According to him, the roadmap for the implementation of the sustainability standard reporting is in different phases, between 2024 and 2030 for big and small businesses; in the area of sustainability reporting and assurance of timeline.

Olowo assured that FRCN would provide resources and support for the seamless transition into the new financial reporting through advocacy, technical support, capacity building, training for easy preparation of financial reports to attract investors’ confidence in businesses.

Commending the FRCN, NGX RegCo, the Chairman of ISSB, Emmanuel Faber stressed the importance of incorporating sustainability standards into financial reporting, especially in addressing climate change and transition risks.

Faber expressed confidence that the ISSB’s sustainability financial reporting standard would enhance transparency and credibility within Nigeria’s business community and supply chains.

He thereafter pledged full support from ISSB to Nigeria in implementing the roadmap, aiming to build more resilient business models and economic stability.