The Federal Government says companies involved in fighting climate change are to begin the disclosure of financial accounts starting from Jan. 1, 2024.
The Executive Secretary of the Financial Reporting Council of Nigeria (FRCN), Amb. Shuaibu Ahmed said this at the inauguration of the Adoption Readiness Working Group (ARWG) for the implementation of sustainability reporting standards on Wednesday in Abuja.
Ahmed said that the initiative which is in line with the International Sustainability Standards Board would promote transparency and accountability of financial information to investors.
The early adoption of the policy was part of the recommendations made during the COP 27 Climate Change Conference held in Egypt in 2022.
He said that the latest development followed an explosion in the burden of non-financial reporting requirements on companies.
He said the program could not have come at a more auspicious time other than now when the primary users of general-purpose financial statements are calling for more transparent, comparable, and verifiable sustainability-related financial information.
“This will help investors, lenders, creditors, and other stakeholders assess an entity’s enterprise value.
“We are now in a world where reliable sustainability information is becoming as important as financial information.
“The focus on financial statements is a viable way to an integrated approach to financial information, environmental, social and governance or sustainability information and broader non-financial information,” he said.
Ahmed further said that the issuance of two sustainability standards; General Requirements for Disclosure of Sustainability-related Financial Information and Climate-Related Disclosures, would provide investors with knowledge about risks and opportunities facing an entity.
“This will also inform their decisions on providing resources,’’ he said.
Earlier, the Permanent Secretary, Ministry of Industry, Trade and Investment, Dr. Evelyn Ngige, commended the agency for setting up the ARWG to mainstream the sustainability reporting standards.
Ngige was represented by Baba Alkali, Director, Policy, Planning, Research, and Statistics in the ministry.
She said that the first two standards, when finally issued on June 26, 2023, would be implemented by Nigerian private sector entities that apply the International Financial Reporting Standards (IFRS).
According to her, they are expected to adopt it with the various commencement dates in the standards.
“There is a global understanding that the implementation of IFRS S1 and
S2 will enhance corporate reporting and unlock capital, especially in emerging markets like Nigeria.
“Therefore, I implore all of you to work tirelessly to ensure that these standards are appropriately implemented,’’ Ngige said.
Dr Ndidi Nnoli-Edozien, a Board member representing Africa at International Sustainability Standards Board (ISSB) expressed optimism about the success of the adoption of IFRS S1 and S2 when they come into effect.
“These standards have been long awaited and it is my hope that it will play a unique role in the information being reported by entities for investors and other stakeholders to rely on in their decision making,’’ she said.
