The Financial Reporting Council of Nigeria Emphasizes Accountability in Sustainability Reporting
The Financial Reporting Council (FRC) of Nigeria has made it clear that no form of whitewashing will be tolerated in sustainability reporting. It also emphasized that board directors will be directly accountable for the accuracy of sustainability and climate disclosures once these requirements become mandatory. This message was delivered by Dr. Rabiu Olowo, Executive Secretary/Chief Executive Officer of the FRC, during a recent event.
The event, known as the Directors’ Engagement Series, was jointly facilitated by the FRC and the Climate Governance Initiative Nigeria. The theme of the session was “IFRS S1 and S2: What Every Board Director Needs to Know.” According to Mitiga Solutions, IFRS S1 and S2 are the first two sustainability disclosure standards issued by the International Sustainability Standards Board in June 2023.
Nigeria was the first African country to adopt these standards. Currently, the nation is in the voluntary adoption phase, with 2028 marking the start of compulsory compliance. Speaking at the engagement, Dr. Olowo highlighted the importance of board accountability in sustainability and climate governance.
He stated, “One key message today is clear: boards are accountable for sustainability and climate governance. The CGI has partnered with us to deepen this conversation in the boardroom, where governance responsibility truly resides. What we are doing today will significantly support the future of sustainability and climate standards adoption in Nigeria.”
A Strategic Approach to Adoption
Nigeria’s journey toward adopting the International Sustainability Standards Board (ISSB) standards began at COP27 in Egypt in 2022. The FRC established the Adoption Readiness Working Group (ARWG), which included major stakeholders such as the Central Bank, SEC, NGX, professional accountancy bodies, the Big Four, assurance firms, real estate companies, and independent sustainability experts. The ARWG worked for eight months and produced the Roadmap Report for the Adoption of IFRS Sustainability Disclosure Standards in Nigeria.
Olowo noted that the country has already produced the first set of early adopters, including MTN, Seplat, Fidelity Bank, and Access Bank. These entities serve as models for all corporate entities as adoption becomes mandatory in 2028 for the 2027 reporting year.
Since publishing the roadmap, the FRC has focused on voluntary adoption, awareness, capacity building, training, and advocacy. To date, more than 32 webinars, workshops, and engagements have been conducted free of charge in the public interest. Over 168 entities and more than 1,800 participants across sectors have been trained. Nigeria was featured in the ISSB Global Reporting Jurisdictional Profile, and the FRC won the UNCTAD ISAR Award for Sustainability Leadership, a national achievement.
The Role of Boards in Sustainability Governance
Dr. Olowo reiterated that climate and sustainability governance is a core fiduciary responsibility. He urged directors to ensure their sustainability disclosures are decision-useful, verifiable, comparable, and integrated with financial information. This requires stronger internal processes, better data quality, improved management capacity, and risk management frameworks that incorporate climate-related risks.
He reaffirmed the FRC’s commitment to supporting all organizations, emphasizing that efforts are aimed at achieving real impact. “Whitewashing will not be tolerated; our efforts target real impact,” he said.
The FRC boss also highlighted the direct link between adopting sustainability standards and attracting capital. He stated, “I would personally invest in a company aligned with sustainability over one that is not, even if the latter posts higher profits. Sustainability alignment signals long-term viability.”
Perspectives from Industry Experts
Tomi Adepoju, Partner & Head, Enterprise Risk and ESG Services, KPMG in Nigeria, observed that many board members and executives in Nigeria still doubt the relevance of sustainability. She affirmed that board directors need to shift their mindset, as there are real climate risks impacting businesses.
Adepoju emphasized the importance of understanding geopolitical trends shaping sustainability reporting. She added, “Directors must understand these trends, track regulatory changes, and ensure their organisations have strong systems and controls. Boards must invest in sustainability teams, ESG data tools, and assurance processes.”
Some of the questions she suggested directors should ask include, “How is the board providing oversight and internal controls for sustainability reporting? How are sustainability risks and opportunities embedded in business strategy?”
The Importance of Board Buy-In
Mrs. Remi Odunlami, a non-executive director at FirstBank, shared her experience with the bank’s dedicated ESG unit. She emphasized the need for a sustainability champion within corporate entities, noting that it doesn’t have to be the CEO.
Dr. Innocent Okwuosa, Chairman of the Nigerian Integrated Reporting Committee, stressed the importance of board buy-in for successful implementation. He stated, “Awareness is key; they must be aware, and they must authorise the resources with which this implementation can be done.”
Okwuosa also highlighted the opportunities in sustainability, such as increased awareness of carbon emissions and shifting consumer behavior. He noted that businesses are tailoring products to meet this demand and that sustainability has become a cost-saving measure and a driver of innovation.
