The Central Bank of Nigeria (CBN) has urged financial sector regulators to strive to build on the momentum of sustainable financing development by supporting and promoting the evolution of an economy driven by sustainable finance.
The CBN believes that integrating sustainability aspects into financial services regulation would strongly help sector regulators to take a leading role in creating a more sustainable and inclusive economy.
The term sustainability was born out of the concept of Sustainable Development defined by the World Commission on Environment and Development, as “meeting present needs without compromising the ability of future generations to meet their needs.”
And sustain- able finance entails creating economic and social value through financial models, products and markets that are sustainable over time.
There is a growing evidence on the positive nexus between environmental and social management and improved economic performance, an increasing number of financial institutions worldwide are adopting sustainable finance practices to ensure that economic development is not achieved at a cost to our ecosystem and our future generations, A’isha Mahmood, special adviser to the CBN governor on Sustainable Banking, said, Wednesday.
According to her, while the financial sector has a one dimensional goal of maximisation of profits and Return on Investment, Sustainable Development concepts pursue a balance between environmental protection, social equity and economic development.
She told members of the Financial Sector Regulating Committee (FRSCC), in a training, about the critical need to always identify, promote and realise the adoption of best environmental and sustainability practices at all levels of financial institution operations to make a positive difference to the future generations.
The training was organised in collaboration with the UN Environment Programme Finance Initiative (UNEPFI).
Mahmood said the training would provide an opportunity for Nigerian financial services regulators to accelerate the global transition to Sustainable Development by imbibing economic, so- cial and environmental sus- tainability.
“The primary aim of this training is to introduce sustainable finance to the financial services regulating committee member agen- cies, including National Pen- sion Commission, Securities and Exchange Commission and the National Insurance Commission, among others.
“This will help them to imbibe and integrate sustainable finance into their day-to-day financing business operations,’’ Mahmood said.
Consequent to the growing evidence that environmental and social issues present growing risks to economic growth, the Nigerian Financial Sector developed and adopted the Nigeria Sustainable Banking Principles, which is an industry led initiative needed to build a more resilient, robust, environmentally and socially responsible financial sector, she noted.
Although the Nigerian Financial Sector has signalled its commitment to sustainability by the adoption and implementation of the Nigeria Sustainable Banking Principles (NSBP), Yuki Yasul, deputy head, UN Environmental Programme, said there was huge fund- ing gap in ensuring green sustainable and inclusive economy.
