The Financial Reporting Council of Nigeria has emphasized its firm stance against greenwashing in sustainability reporting by entities.
The Chief Executive Officer, FRCN, Mr Rabiu Olowo gave the warning at the launch of the roadmap for the adoption of the Sustainability Financial Reporting Standard in Nigeria.
Olowo vows to utilize the extensive expertise of Adoption Readiness Working Group (ARWG) members to ensure robust regulatory oversight for the benefit of the nation.
- “Let me reiterate that, having gone this far, the Financial Reporting Council of Nigeria will not tolerate greenwashing in reporting sustainability by entities and will leverage on the efforts of ARWG members’ rich expertise to deliver topnotch regulatory supervision in the interests of the country,” he said.
Greenwashing is the process of conveying a false impression or misleading information about how a company’s products are environmentally sound.
It also involves making an unsubstantiated claim to deceive consumers into believing that a company’s products are environmentally friendly or have a greater positive environmental impact than they actually do.
Olowo said that the launch of the roadmap asserts Nigeria leadership role in the adoption of the ISSB’s sustainability standard.
Draft on the roadmap for sustainability reporting
He noted that President Bola Tinubu during a visit of the ISSB’s team 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 February 1, which period of exposure ended on March 14.
Olowo said that sustainability financial reporting standard unlocks capital flow, improve transparency across value chains, leading to greater and healthy competitiveness for companies.
He noted that the financial reporting standard will also lead 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.
- “This event is the third in Nigeria’s sustainability journey and signifies a remarkable one, following the unveiling of the roadmap for sustainability reporting in Nigeria.
- “The visit of Emmanuel Faber and his team is not only a testament to Nigeria’s support of the ISSB, but also an encouragement to all stakeholders.
- “Nigeria has become a good reference point in the globe, which has a good practice to be emulated,” he said.
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.
The Chairman of ISSB, Mr Emmanuel Faber commended the FRCN, NGX RegCo and other working team members for their hard work that led to the adoption roadmap for the Sustainability Financial Reporting Standard in Nigeria.
Climate change and transition
Faber stated that financial reporting must encompass sustainability standard which addresses climate change and transition risk, which is inevitable for businesses and nation.
He explained that it is not enough to report financial reporting in accounting alone, because accounting is counting a lot of things that counts, but not everything that counts.
He stated that accounting does not considers long term, National assets, human capital and other aspects of resilience of macroeconomic models and micro economic business models, which sustainability standard covers.
- “If accounting really envisages, the naira will not be sitting where it is, because investors, credit rating, banks and many financial operators would look through the current challenges into the incredible richness of Nigeria’s human and natural capital and resources,” he said.
According to him, the ISSB sustainability financial reporting standard would help Nigeria community and corporations to becoming the most transparent and credible in supply chains and before investors, using appropriate metrics.
Faber pledged that the ISSB would fully support Nigeria in the implementation of the roadmap of the sustainability standard to build business model for a more resilient and economic stability.
