Capital Market Stakeholders Advocate ESG-compliant Products

Capital market stakeholders have advocated for Environmental, Social and Governance (ESG) compliant products to ensure sustainable financing for businesses.

The stakeholders expressed the view at a workshop on: ‘ESG and Sustainable Finance – The Future of Investments’. The workshop was organised in Lagos by the Securities and Exchange Commission (SEC) in collaboration with Financial Centre for Sustainabilities.

The stakeholders said, the global community had adopted ESG, urging that Nigeria should not be left behind.

The director-general of SEC, Lamido Yuguda called on all business stakeholders to fully support and build an economy that encourages sustainable business practices.

He stated that, “the revised Nigerian Capital Market Masterplan strongly underlines the need to create awareness and actively deploy educational and advocacy campaigns to promote ESG-compliant products.”

He said, this initiative has been identified to be of high priority, demanding immediate implementation and this is one of the Securities and Exchange Commission’s principal reasons for organising this workshop, in collaboration with our co-hosts, the Financial Centre for Sustainability (FC4S).

Yuguda noted that “it is reassuring to witness a growing number of institutional investors and funds embracing various ESG investing approaches in recognition of the potential positive impact on individuals, businesses and society.

He added that Nigeria has the opportunity to drive positive changes through the focused promotion of ESG and sustainable finance in its financial markets.

He anticipated continued growth in the sustainable finance environment and in particular, within the Nigerian bond market, adding that, “this will present a significant opportunity for the Nigerian capital market to expand its product offerings, and provide more long-term financing for businesses while protecting the environment, reducing inequality, promoting security and fostering national economic prosperity.”

The divisional head, Capital Markets at Nigerian Exchange Limited (NGX), Jude Chiemeka, highlighted the importance of Environmental, Social, and Governance (ESG) compliance and the democratisation of data in attracting investments and enhancing stock liquidity in the Nigerian capital market.

Chiemeka offered advice to investors, urging them to consider companies that are ESG-compliant and provide transparent and high-quality disclosures. He stressed the significant correlation between ESG disclosures and corporate performance.

Chiemeka also commended SEC for its efforts in establishing a sustainable finance framework, especially, in regards to green bonds, saying, “Nigeria’s issuance of a green bond solidified its position as the first sovereign country in Africa to do so, and we applaud the SEC’s role in making this possible.”

The managing director of Environmental and Social Sustainability, Mr Adrian Mill said that ‘today’s event really amplifies Nigeria’s growing alignment with global ESG and sustainability trends.’

He urged Nigerian companies to integrate reducing climate change risk in their activities, saying that ESG should be part of every company because it was trending worldwide.

CEO of CSCS, Haruna Jalo-Waziri explained that Nigeria should focus on sustainability and governance that deal with environmental sustainability, saying that funds will be cheaper to source for a company that is ESG compliant.