Rabiu Olowo: Sustainability Reporting Has Propelled Renewed Confidence in Capital, Bond Markets

•Rallies regulators to harmonise changing global standards
James Emejo in Abuja

The Executive Secretary/Chief Executive, Financial Reporting Council Of Nigeria (FRC), Dr. Rabiu Olowo, has declared that the phased implementation of the sustainability reporting standards was impacting on renewed confidence in the capital and bond markets – which are crucial indicators of economic growth.
He said over the last decade, the world has witnessed a profound transformation in corporate reporting, with sustainability disclosures now standing shoulder to shoulder with financial reporting as a driver of investor confidence, market stability, and long-term growth.
The FRC boss spoke at the opening of the 2nd Regulatory Roundtable on Sustainability Reporting in Nigeria, which was organised by the council in Abuja.
He noted that the country had taken a bold step by adopting the International Sustainability Standards Board (ISSB) standards, beginning with IFRS S1 and S2., adding that “Our leadership in this regard signals not only alignment with global best practice but also our determination to shape Africa’s sustainability journey.”
He said the roundtable with regulators came at a crucial time, particularly with the recent amendments to IFRS S2 and the emerging adoption challenges faced by preparers.
He said, “We have convened you, our sister regulators, market operators, and reporting entities here today, to exchange perspectives, foster mutual understanding, and build the necessary cooperation for seamless implementation. For sustainability reporting to succeed, it must be embraced as a shared responsibility.
“Our gathering today is not simply about compliance; it is about collaboration, working together to ensure that Nigeria’s capital markets remain credible, that our businesses are globally competitive, and that our economy attracts sustainable investment while safeguarding the environment and society.”
In an interview with THISDAY, he said the gathering seeks to ensure harmonisation, collaboration, and alignment as “we go through the implementation period. This is really important to deliver harmonised standards globally, which must be uniform.”
He said for the ISSB sustainability standards, the goal is to deliver accountability and transparency across all our reporting entities.
Olowo said, “Our role as financial reporting regulators is to bring everyone together and ensure alignment between us and other sectoral regulators as they regulate their industries and sub-sectors.
“There have been some changes to IFRS S2, especially, and I want to make sure we highlight jurisdictional concerns around the standard, discuss salient issues, and find principle-based solutions that we can incorporate into the implementation efforts.”
He said a lot of progress had been recorded in the implementation so far.
He said, “Recall that we had the Adoption Readiness Working Group, which delivered the adoption roadmap for sustainability reports in Nigeria. We had about four early adopters, which was really encouraging.
“We are currently in the voluntary adoption phase, with many companies keen to participate. This voluntary adoption will continue into 2028 for the 2027 reporting period.
“We’ve seen hundreds of companies interested, which indicates that our roadmap toward the mandatory phase is on track. So, yes, quite a lot of progress.”
He explained that MSMEs are to also indirectly with the new reporting framework.
Olowo said, “While the primary target for the reporting standard was the large companies, known as public interest entities, these big companies rely on suppliers, many of which are small businesses.
“So, we are incorporating the responsibilities of those small companies across the value chain.
“The big companies have a role in helping their suppliers incorporate sustainability reporting standards. So it is indirect rather than direct engagement with the smaller businesses.”
Nonetheless, he said, “Recently, the International Sustainability Standards Board (ISSB) proposed amendments to IFRS S2, addressing concerns raised by stakeholders and regulators.
“Key areas of concern include:
Scope 3 Emissions Reporting: Stakeholders have expressed difficulties in reporting Scope 3 Category 15 emissions, particularly for financial sector companies. The ISSB proposes relief from disclosing emissions associated with derivatives, facilitated emissions, and insurance-associated emissions, allowing companies to focus on financed emissions.
“Global Industry Classification Standard (GICS): Companies have faced challenges in using GICS for disaggregating financed emissions information. The ISSB proposes flexibility in using GICS for commercial banking and insurance activities.”
He said, “Global Warming Potential (GWP) Values: Stakeholders have raised concerns about using the latest Intergovernmental Panel on Climate Change (IPCC) GWP values. The ISSB proposes allowing entities to use jurisdiction-required GWP values.
“Measurement Methods: Companies have faced difficulties in applying the Greenhouse Gas Protocol for GHG accounting. The ISSB proposes clarifying the use of alternative measurement methods aligned with jurisdictional requirements.
“Industry-Based Guidance: The ISSB is proposing updates to industry-based guidance on implementing IFRS S2 to maintain alignment with climate-related content in the SASB Standards, affecting nine prioritized industries and 37 additional industries.
“These amendments aim to ease application challenges, reduce reporting duplication, and lower compliance costs while maintaining decision-useful information for investors. The ISSB plans to finalise these amendments by the end of 2025. Some of these amendments deter to regulations and jurisdictions and one of objective of this regulatory roundtable is to robustly discuss on the best path for Nigeria in easing reporting for preparers devoid of multiplicity and duplicity of regulatory reports.
Participants included the leadership of the Nigerian Exchange (NGX), the Securities and Exchange Commission (SEC), among other regulators.