Nigeria Sets Deadline For Eco-Friendly Reporting Standards Implementation

Nigeria has taken a significant step towards environmental responsibility by announcing plans to enforce eco-friendly reporting standards for businesses within the next four years. Non-compliant companies may face sanctions as a consequence.

This decision reflects a response to increasing global investor interest in companies’ environmental, social, and governance (ESG) practices. As Africa’s largest economy and a major oil exporter, Nigeria seeks to enhance investor confidence and attract sustainable investments.

In June of last year, Nigeria committed to adopting International Financial Reporting Standards (IFRS) pertaining to environmental and climate change disclosures. A collaborative effort involving government regulators, business representatives, and capital market operators has now outlined a roadmap for implementing these standards.

Rabiu Olowo, the head of the Financial Reporting Council of Nigeria, emphasized the necessity of genuinely integrating sustainability into business operations. “It’s not just about ticking boxes,” Olowo emphasized, stressing the importance of combating greenwashing and promoting transparent sustainability practices.

Companies are encouraged to voluntarily adhere to these standards between 2024 and 2027, with potential financial penalties for non-compliance, although specific details were not provided. Small businesses have been granted an extended deadline until 2030 to meet the requirements.

While Nigeria is the first African nation to adopt such stringent reporting standards, it faces challenges stemming from historical environmental issues such as gas flaring and inadequate waste management practices. Nevertheless, with President Bola Tinubu’s commitment to ensuring compliance, Nigeria aims to make significant progress in environmental accountability and sustainable business practices.