The Financial Reporting Council (FRC) has expressed concern over the low level of adoption of sustainability reporting among companies in Nigeria’s industrial and consumer goods sector.
Rabiu Olowo, executive secretary and CEO of the FRC, made this known during the Industry-Specific workshop on the ‘Implementation of ISSB’s IFRS S1 and S2 for Industrial and Consumer Goods Companies’, held on Tuesday in Lagos.
“As a regulator, we are concerned that none of the industrial and consumer goods companies in this sub-sector of the economy is yet to be part of the adoption roadmap in Nigeria for sustainability reporting,” Olowo said.
He urged companies to take advantage of the current voluntary phase, which spans from 2024 to 2027, in order to adequately prepare for the mandatory period beginning in 2028.
Olowo highlighted the FRC’s proactive approach to the global standard-setting process for sustainability reporting under the International Sustainability Standards Board (ISSB). He noted that Nigeria had declared its intention for early adoption from the outset and followed through by establishing a dedicated technical body, the Adoption Readiness Working Group for Sustainability Reporting in Nigeria (ARWG).
According to him, the ARWG midwifed the Adoption Roadmap for Nigeria’s sustainability reporting. He added that the roadmap includes phased implementation plans and regulatory discretionary reliefs, allowing for reporting and assurance processes to run from 2023 through 2030, rather than strictly adhering to the ISSB’s official effective date of 2024.
Stressing the value of sustainability reporting, Olowo said it offers more than compliance; it serves as a tool for brand enhancement and long-term competitiveness.
“By adopting sustainability reporting, industrial and consumer goods companies can demonstrate their commitment to responsible and sustainable business practices, which can enhance their reputation and brand value,” he said.
He further noted that integrating Environmental, Social, and Governance (ESG) considerations into decision-making and corporate reporting enables companies to contribute meaningfully to sustainable development and climate action.
He warned that climate change is not merely a business risk but a pressing reality that demands urgent and collective action.
“The impending negative effect of climate change requires everyone to act, and it is therefore not a business decision or a nice-to-have. It is a compliance issue, which every company is expected to comply with by default through cultural behaviour,” Olowo said.
He emphasised that sustainability sits at the core of human survival, and that companies in the sector must pay attention to issues such as climate change and environmental risk management, social responsibility and community development, governance and ethics, human rights and labour practices, customer privacy and data protection, as well as financial inclusion and economic development.
The workshop, organised in collaboration with the Nigeria Integrated Reporting Committee (NIRC), is part of FRC’s broader mission to ensure that companies in the industrial and consumer goods space fully understand the principles and expectations of sustainability reporting well ahead of the mandatory compliance window.
Olowo noted that the FRC expects best practices in this area, including the preparation of accurate sustainability reports that link financial performance with sustainable practices, conducting materiality assessments that highlight key ESG issues, engaging with stakeholders across different levels, setting performance metrics and targets, and ensuring assurance and verification to maintain the credibility of reports.
In a virtual contribution, Olufemi Shobanjo, CEO of NGX Regulation Limited, reinforced the importance of transparent sustainability reporting in today’s marketplace. He said, “One of the things you can also gain is enhanced stakeholder trust, where transparent reporting will foster trust among stakeholders, including investors, customers, and regulatory bodies.” Shobanjo added that companies who embrace these standards enjoy a competitive edge.
“It gives you a competitive advantage because you differentiate yourself in the marketplace and, therefore, attract more investments and business opportunities, which helps companies to grow faster and also to increase their customer base,” he explained. He further emphasised the importance of aligning corporate strategy with global sustainability goals, noting that such alignment promotes long-term viability and resilience.
