The Financial Reporting Council of Nigeria (FRC) in collaboration with Nigeria Integrated Reporting Committee (NIRC) have posited that Sustainability report is critical to unlocking foreign capital flow to Nigeria.
They made the call at the occasion of a practical workshop on the implementation of the Independent Standard-Setting Body ( ISSB’s) IFRS and IFRS S2 by financial institutions in Nigeria which took place in Abuja yesterday.
Dr Innocent Okwusa, the chairman of NIRC said: “We have been saying that the implementation of sustainability will lead to unlocking capitals and people wonder how it is going to happen.
“The point is that the owners of capital who export capital rely on the transparency of information in the capital markets, and capital will always flow to those markets, where information is more transparent than others.
“What sustainability does is to increase the level of transparency and therefore reduce the information asymmetry in the capital market. By adopting sustainability standards, Nigeria will improve the transparency in its capital market and be able to attract this capital.
“We’ve also even talked about the other parts of Europe, who are now making sure that if you are exporting to them, you are adopting sustainable practices in your value chain. And if you do not do that, they’re going to leave you.”
In his opening remarks, the Executive Secretary/CEO FRC, Dr. Rabiu Olowo said: “For financial institutions, sustainability reporting is crucial as it enables them to demonstrate their commitment towards responsible banking principles, sustainable practices, risk management and sustainable finance opportunities.
“Sustainability reporting is an essential aspect of responsible banking and finance. I urge you to use this workshop to embrace sustainability reporting, leveraging global frameworks and local guidelines, to demonstrate your commitment to a sustainable future for Nigeria and the world.”
Also speaking at the event, The Co-ordinating Director, Directorates of Accounting Standards and Sustainability Reporting at the FRC, Dr. Iheanyi Anyahara said: “The problem most times with international standards is lack of capacity in jurisdictions where the standard have been adopted, we had experience when the International Financial Reporting Standard was adopted. Many preparers lacked the capacity and there was no much guidance. We had to get people from outside Nigeria.
“This time around the financial reporting Council has learned a lesson from that event, and so is partnering with the Nigeria Integrated Reporting Committee to make sure that we handhold the preparers this time around so that the sustainability standard can be well implemented.”
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