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The Central Bank of Nigeria (CBN) has expressed its dedication to fostering sustainable banking practices by adopting International Financial Reporting Standards as part of a broader strategy to attract foreign investment and achieve economic growth.
The Governor of the CBN, Olayemi Cardoso, stated that the move aligned with the Federal Government's goal of reaching a Gross Domestic Product of $1 trillion by 2031.
He made this statement at the Regulatory Roundtable on the Implementation of ISSB's Sustainability Reporting Standards in Nigeria, held in Abuja on Thursday.
Cardoso emphasised that sustainability reporting had become crucial for stakeholders, and many companies are setting sustainability goals and seeking ways to reduce their carbon footprint.
“The world is moving, and we cannot be spectators. We know that our entities have to live with the global arena and the President of the Federal Republic of Nigeria has set a goal of achieving a GDP of $1 trillion over the next six years,” he said.
Cardoso, who was represented by the Deputy Director, Payments System Policy and Oversight Function, Musa Jimoh, noted that the CBN collaborated with key stakeholders, including banks, discount houses, and other financial institutions, to ensure a smooth adoption process within the banking sector.
He explained, “In 2010, the Financial Reporting Council of Nigeria unveiled a roadmap for the adoption of IFRS, which mandated that all publicly listed and public interest entities transition to these global standards starting January 1, 2012.
"Recognising the importance of this transition, the CBN collaborated with key stakeholders, including banks, discount houses, and other financial institutions, to ensure a smooth adoption process within the banking sector.
"The implementation of IFRS in Nigeria's banking sector, replacing the previous International Accounting Standard, marked a significant milestone in the country's financial reporting landscape.
"The transition, despite its complexities, was effectively managed by the Central Bank of Nigeria (CBN), leveraging its experience in earlier IFRS implementations.
"As a result, the Nigerian banking system has seen substantial growth, both locally and globally, with over 55 subsidiaries, three branches, and four representative offices spread across 30 countries.
"Foreign investments and credit facilities have steadily increased, reflecting growing confidence in Nigeria's financial system.
"The CBN is now focused on implementing the newer IFRS standards, including IFRS S1 and IFRS S2, to further enhance transparency and financial integrity in the banking sector, aligning with global best practices and fostering trust between regulators, investors, and the public.
"The Central Bank of Nigeria (CBN) is driving sustainability within the banking sector by introducing sustainable banking practices in collaboration with the Bankers' Committee."
He said those rinciples focused on managing environmental and social risks, promoting economic stability, and ensuring access to finance for underserved segments of the economy.
Cardoso said banks were required to disclose their sustainability efforts in their audited financial statements.
He noted: "The impact of these initiatives is evident in the growing number of bank branches and ATMs powered by renewable energy, as well as improved waste management practices across the sector.
"The CBN has instituted the Sustainability Banking Awards to encourage compliance.
"As Nigeria continues to implement new global standards, including those addressing climate-sensitive financial disclosures, the CBN acknowledges the challenges ahead and emphasizes the need for capacity development among stakeholders.
"Nigeria is setting a precedent for other African nations as a pioneer in adopting the International Sustainability Standards Board, with the Financial Reporting Council guiding businesses through the transition to a more sustainable future."
