SEC Moves to Align With Global Sustainability Standards

The Securities and Exchange Commission (SEC) has announced plans to formally adopt international sustainability standards as part of its ongoing reforms to strengthen Nigeria’s capital market and align with global best practices. This move comes at a time when regulators worldwide are prioritising environmental, social, and governance (ESG) principles to drive sustainable finance, improve transparency, and ensure accountability in corporate reporting.

According to the SEC, the adoption of global sustainability standards will provide a uniform framework for Nigerian companies to disclose climate-related and sustainability information in line with international benchmarks. This is expected to enhance investors’ confidence, attract more foreign capital, and make Nigerian firms more competitive in the global market. Officials at the commission emphasised that the integration of sustainability guidelines would be gradual, allowing companies to adjust their reporting structures while ensuring compliance with the new requirements.

The commission noted that it is working closely with international bodies, including the International Sustainability Standards Board (ISSB), to harmonise Nigeria’s regulatory framework with global expectations. The ISSB standards, which have already been embraced by several countries, provide a structured approach to reporting material sustainability risks and opportunities that can affect a company’s financial performance.

Market operators and analysts have welcomed the move, describing it as a timely step toward positioning Nigeria as a responsible player in global finance. They argued that investors are increasingly scrutinising ESG compliance before making funding decisions, and failure to adopt internationally accepted sustainability standards could leave Nigerian firms at a disadvantage.

The SEC explained that adopting these standards would not only promote responsible investment but also help in addressing Nigeria’s environmental and developmental challenges. By mandating companies to disclose sustainability data, the regulator aims to ensure that businesses take a proactive role in reducing carbon emissions, promoting social responsibility, and adhering to strong governance practices.

For listed companies, the changes mean that annual financial reports will now carry expanded sustainability disclosures. These will cover areas such as climate impact, resource management, employee welfare, and board governance. The regulator has, however, assured stakeholders that it will provide guidance and technical support during the transition period to avoid overburdening businesses.

The broader implication of this policy is significant for Nigeria’s economy. With increasing global attention on sustainable financing, aligning with global standards is expected to open up new channels of funding for Nigerian firms, especially from international investors and climate-focused development institutions. It is also seen as a crucial step in meeting Nigeria’s commitments under global climate agreements.

Observers say the SEC’s move reflects a broader shift in the Nigerian government’s economic strategy, which now places emphasis on sustainability and resilience. As the country seeks to attract investment and diversify away from heavy reliance on oil, sustainability reporting is being recognised as a key instrument for improving transparency and governance across sectors.

While stakeholders have applauded the development, some businesses have expressed concerns about the cost of compliance, particularly smaller firms that may not have the resources to implement complex reporting systems. In response, the SEC has promised to roll out the standards in phases, prioritising larger listed firms first before extending to smaller companies over time.

The commission has also indicated that capacity-building initiatives, including training sessions for company executives, auditors, and market operators, will accompany the rollout. This is to ensure that stakeholders fully understand the requirements and the long-term benefits of adopting sustainability practices.

Analysts believe that once operational, the policy could help Nigeria tap into the fast-growing pool of ESG-driven investment funds, which now control trillions of dollars globally. By aligning with international norms, Nigerian companies could gain easier access to these funds, improving liquidity in the capital market and supporting long-term growth.

In the coming months, the SEC is expected to issue detailed implementation guidelines, outlining timelines, compliance thresholds, and monitoring mechanisms. The regulator has also hinted that sanctions may be imposed on companies that fail to comply once the standards are fully operational.

Ultimately, the adoption of global sustainability standards by the SEC marks a new chapter in Nigeria’s capital market reforms. If implemented effectively, it could strengthen investor trust, boost competitiveness, and ensure that Nigerian businesses contribute meaningfully to global sustainability efforts while enhancing long-term economic stability.