Capital and Climate Action: The Sustainability Positioning of Nigeria’s Development Finance Institutions  

SOStainabilityWeekly

Edited by Oke Epia, E-mail: sostainability01@gmail.com  | WhatsApp: +234 8034000706

Washing and Hushing

Nigeria stands at a pivotal moment in its development trajectory. The nation’s ambitions for economic growth, resilience, and climate action require more than capital; they demand the strategic, transparent deployment of that capital. At the heart of this endeavor are Nigeria’s Development Finance Institutions (DFIs) – public financial entities tasked with directing investment into transformative sectors such as industry, agriculture, trade, and small enterprises.

For decades, DFIs have long been the hidden engines of transformation and national development. They are the backbone of industrialisation, agricultural expansion, and export growth. But today, that confidence now intersects with a new reality: climate change is no longer a distant threat. It is a present economic and social challenge that reshapes every balance sheet, credit decision, and strategic plan. In this context, visibility – what is disclosed and what is accessible has become as critical as the capital itself. The expectations placed on DFIs now extend beyond internal strategy and policy documents. Stakeholders, including investors, regulators, civil society, and citizens, require clear evidence of how these institutions manage climate risk, embed sustainability into operations, and align governance with national obligations under the Nigeria Climate Change Act. Before now, DFI’s performance has been measured by the volume of finance mobilized, the number of projects delivered, or the number of jobs created. Yet, as the world confronts the escalating impacts of climate change and as global finance shifts toward transparency and sustainability, a crucial question arises: how visible are these institutions in terms of sustainability and climate action? Are their policies, targets, and governance structures aligned with the obligations of the Nigeria Climate Change Act and with global norms? What do the public investors, regulators, civil society, and Nigerian citizens genuinely know about how these DFIs manage climate risk or pursue sustainability outcomes? Are targets measurable and time-bound? The absence of this information signals systemic gaps in oversight, strategic alignment, and public accountability.

The Disclosure and Transparency Imperative

The years since President Muhammadu Buhari signed the Nigeria Climate Change Act into law have seen regulatory contours sharpen around climate accountability. The Act requires public and private actors to base environmental disclosures, risk reporting, and governance mechanisms on publicly accessible formats. Accountability in this context is structural, not optional. Transparency, in turn, is the baseline for attracting global climate capital, coordinating public policy, and guiding national climate planning. DFIs, by virtue of their mandate and scale, are expected to exemplify this standard.

Against that backdrop, SOStainability’s Sustainability Visibility Scan (SVS) turns its lens on Nigeria’s key Development Finance Institutions. These are entities that hold immense sway over where capital flows, which sectors thrive, and how resilient those sectors can be in the face of climate volatility. What this week’s scan reveals is a landscape of fragmented visibility, where some DFIs are taking tentative steps towards transparency, while others remain opaque in areas that matter most for climate, competitiveness, and public accountability. This SVS does not rely on narrative aspiration or internal claims. It seeks to answer that question through empirical evidence rather than narrative aspiration. It therefore evaluates what is publicly visible, what is missing, and what those gaps reveal about the readiness of Nigeria’s development finance architecture to meet the twin imperatives of economic growth and climate resilience. It invites reflection, scrutiny, and, ultimately, action. For a sector that shapes the nation’s economic landscape, the question is urgent and unavoidable: can Nigeria’s DFIs make their climate commitments as visible as their financial footprints?

How We Examined the DFIs

In the weeks leading up to this publication, our team undertook a comprehensive Sustainability Visibility Scan (SVS) of five key development finance institutions in Nigeria. These entities- Bank of Industry (BOI), Bank of Agriculture (BOA), Development Bank of Nigeria (DBN), NIRSAL Plc, and Nigerian Export–Import Bank (NEXIM)- represent the backbone of Nigeria’s financial architecture for industry, agriculture, trade, and export development. The SVS does not evaluate intentions, statements of goodwill, or internal policies, but what is publicly visible and verifiable: the evidence that any member of the public, investor, regulator, or civil society actor could easily access and scrutinize. Our approach was guided by three principles. First, rigor over assumption: every score reflects documented evidence. Publicly accessible reports, annual statements, policy documents, portfolio disclosures, and credible media coverage formed the basis for scoring. If an institution referenced climate, environmental, or sustainability programs only in press releases, promotional materials, or non-verifiable media interviews, it did not count. This ensures that the SVS reflects real transparency, not aspirational rhetoric. Second, alignment with the Nigeria Climate Change Act: the Act is the country’s statutory anchor for climate accountability, mandating public disclosure, climate governance, and measurable targets. Our evaluation examines whether DFIs are making their climate commitments, risk management practices, and sustainability policies accessible to the public in a way that allows for external oversight, in accordance with national law. This lens distinguishes SVS from typical ESG reporting reviews, emphasizing structural visibility as a prerequisite for compliance and policy alignment. Third is systemic relevance: DFIs operate not in isolation but at the intersection of national policy, financial markets, and sectoral development. Their climate visibility is not merely a corporate communications issue; it determines where capital flows, how risk is managed, and whether national climate objectives can be realistically achieved. For each DFI, the SVS evaluates visibility across four critical dimensions: Climate Policy, Climate Reporting, Climate Targets, and Governance Structures. Each dimension is scored from zero to three, with zero representing absent or non-verifiable disclosure, and three representing full public visibility and alignment with national and global best practices. The scores are then aggregated to produce an overall visibility rating out of twelve. The SVS further distinguishes between CSR-type disclosures and climate-aligned visibility. Many institutions publish social outreach initiatives, community development stories, or promotional green projects. While these may demonstrate intent, they do not substitute for the structured, policy-anchored transparency that enables accountability and strategic planning. Only evidence that clearly demonstrates climate integration at the policy and governance levels is scored. Our investigation drew on a wide range of publicly accessible evidence, including institutional websites, annual reports, portfolio disclosures, and governance statements. We sought to capture not only the presence of sustainability and climate policies, but also the accessibility of reporting, the existence of measurable targets, and the visibility of governance structures responsible for climate oversight. This was cross-checked against independent sources, including credible media coverage and multilateral development bank assessments, to ensure that our conclusions reflect what is demonstrably visible to the public. In applying the SVS framework, we emphasised visibility over assertion. Policies or targets that exist internally but are not publicly accessible were treated as absent. Reporting that is partial, outdated, or unclear was scored accordingly. The intent is not to audit internal processes, but to measure the transparency that allows external stakeholders, including regulators, investors, and citizens, to understand how these institutions manage climate risk and pursue sustainability outcomes. The SVS provides a map of Nigeria’s DFIs in terms of climate and sustainability transparency by focusing on what is publicly visible. The exercise highlights where visibility gaps persist, how these gaps intersect with national climate obligations, and where improved disclosure could strengthen accountability, attract climate finance, and enhance public confidence. Simply put, what cannot be seen cannot be managed, and in the context of Nigeria’s development finance system, visibility is a prerequisite for responsible, strategic decision-making.

What the Evidence Shows

The scan reveals a complex picture. Among the DFIs, BOI emerges with the most visible climate footprint, publishing a sustainability-focused section and referencing climate-aligned lending initiatives. Even at that, targets are largely aspirational, with little in the way of quantified, time-bound objectives publicly disclosed. Reporting is intermittent, and governance structures for climate oversight are implied rather than explicitly delineated. BOA and DBN show scattered signals: references to green loans, agricultural resilience programs, and ESG risk considerations appear in annual reports, but no standalone climate policy or comprehensive governance disclosure is visible. NEXIM and NIRSAL provide minimal online evidence of climate-related strategy; their reporting focuses on portfolio growth and sectoral support, with sustainability largely absent from publicly accessible documentation. Across the board, the scan exposes a sector in motion but largely invisible on core climate dimensions. Policy, reporting, targets, and governance are inconsistently disclosed, with no institution yet demonstrating the full complement of public-facing climate accountability expected under national and global standards.

Institutional Snapshots

The Bank of Industry: The BOI has long been recognized as Nigeria’s primary vehicle for industrial finance, supporting manufacturing clusters, small and medium enterprises, and sectoral modernization programs. Its influence on economic transformation is significant, and the exposure of industrial sectors to energy demand, pollution, and resource-intensive operations positions BOI at the intersection of development finance and climate responsibility.
The Bank of Industry presents the clearest signal of climate engagement. Its website features references to green financing initiatives, renewable energy projects, and industrial sustainability programmes. Annual reports highlight support for low-carbon industrial clusters and small enterprises adopting climate-smart practices. Despite these indicators, BOI stops short of publishing a standalone climate policy or fully articulating measurable, time-bound targets, leaving a gap between intention and demonstrable accountability. Governance structures for climate oversight are implied through references in reports but not explicitly detailed, meaning public scrutiny of board-level climate responsibility is constrained.
An analysis of publicly available sources reveals that the bank provides insight into its climate and sustainability efforts. While BOI publishes annual reports that outline financing volumes, sectoral distribution, and developmental outcomes, dedicated environmental, social, and governance disclosures are minimal. There is no clearly labeled climate policy accessible on its website, and reporting on environmental risk or sustainability performance is partial at best. References to green finance or energy efficiency interventions are scattered and non-specific, making it difficult to quantify impact or verify alignment with national climate objectives. The absence of measurable targets further constrains the institution’s visibility and climate credibility. Stakeholders cannot ascertain, from publicly accessible information, the proportion of loans directed toward low-carbon or resilient industrial projects, nor the progress against stated intentions for climate-conscious financing. Governance visibility is similarly limited: while risk management structures are described in financial terms, there is no explicit board-level oversight of sustainability or climate issues. For a DFI of BOI’s size and mandate, this represents a significant gap in public accountability and climate leadership.  

The Bank of Agriculture: The BOA is tasked with mobilizing finance for smallholder farmers, cooperative groups, and agribusiness ventures, positioning it as a key instrument of rural development and agricultural resilience. Its role is inherently climate-sensitive: agricultural production in Nigeria is directly influenced by temperature shifts, rainfall variability, and soil degradation. Yet the publicly available information on climate-aligned operations is sparse. The Bank of Agriculture exhibits scattered signals of climate awareness. The institution publishes program-level mentions of climate-smart agriculture and resilience interventions, particularly within its rural and smallholder financing schemes. BOA’s official reports and website emphasize credit facilitation and loan programs, but provide no dedicated sustainability or climate policy, nor is there evidence of systematic disclosure of environmental risk assessments. The institution does reference support for irrigation projects, agro-processing, and mechanization, yet none of these interventions are linked to quantifiable climate targets or resilience outcomes. Governance oversight of sustainability is not publicly documented, with board and management reporting focused almost exclusively on financial risk and credit performance. The limited reporting and absence of measurable targets mean that stakeholders, whether policymakers, investors, or farming communities, cannot independently evaluate the bank’s climate alignment.

Development Bank of Nigeria: As a national development finance institution with a focus on micro, small, and medium enterprises, the Development Bank of Nigeria has the potential to influence climate-sensitive investment across multiple sectors. Its strategic alignment with national development priorities could make it a conduit for green finance, especially in enterprises requiring energy-efficient technologies or sustainable business models. Public disclosures, however, show a mixed picture. It shows early-stage recognition of ESG principles within its small and medium enterprise (SME) and infrastructure financing. The DBN website and annual reports highlight developmental outcomes and financial inclusion metrics, but dedicated climate or sustainability policies are not readily visible. Some references are made to support environmentally responsible projects, yet these references lack measurable, time-bound targets. Report on sustainability performance or climate risk is limited and non-systematic, while governance oversight specific to climate or ESG matters is absent from public documents. In effect, the institution demonstrates an awareness of sustainability in principle but provides little visible evidence of structured accountability or measurable climate action.

NIRSAL: The Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) Plc occupies a strategic position in Nigeria’s agricultural finance ecosystem, designed to de-risk lending and expand access to credit for smallholder farmers and agribusinesses. Its interventions have the potential to shape the resilience of Nigeria’s food systems, directly impacting climate adaptation in a sector highly vulnerable to erratic rainfall, flooding, and desertification. Yet, despite the centrality of climate to its mandate, publicly available evidence suggests that the institution remains largely opaque on sustainability practices. The institution’s online presence and official reports highlight its commitment to promoting “climate-smart agriculture” and supporting sustainable farming practices. However, these references are general statements rather than structured policies. No dedicated climate or environmental policy is publicly accessible, and there is little to no evidence that environmental risk is systematically integrated into loan guarantees or insurance mechanisms. Sustainability reporting is limited to operational metrics and financial outcomes, with no quantified indicators of climate impact or emissions reductions. Targets for green finance mobilization or resilience-building interventions are largely absent, and governance structures for sustainability oversight, such as board-level committees or senior management roles, are not disclosed. The effect is an institution whose strategic relevance to Nigeria’s climate adaptation agenda is unquestionable, but whose public visibility does not allow stakeholders, including investors, regulators, or farmers, to assess climate alignment or accountability. Without transparency, it is difficult to determine whether financing decisions genuinely embed environmental considerations or how climate-related risks are mitigated across the agricultural value chain.

NEXIM: The Nigerian Export–Import Bank is positioned as a catalyst for export-oriented businesses, promoting trade competitiveness while supporting sectors with significant environmental footprints, including manufacturing, energy, and agro-processing. Its mandate intersects with climate imperatives through the financing of energy efficiency improvements, green technologies, and trade in low-carbon goods. Despite this potential, NEXIM’s public disclosures are limited. The institution references “sustainability” in strategic documents, yet there is no publicly accessible, structured climate policy. Reporting on environmental impact, risk mitigation, or climate-aligned financing is largely absent. The bank does not provide measurable targets for green finance or climate resilience projects, nor are there indications of governance structures explicitly overseeing sustainability. While programmatic highlights suggest some awareness of sustainability, the lack of structured disclosure diminishes public confidence in the institution’s readiness to manage climate-related risks in its portfolio. As with other DFIs, the absence of visible, verifiable climate accountability undermines the ability of regulators, investors, and civil society to assess the institution’s alignment with national climate obligations.

Trends and Threads

Connecting Climate Ambitions With Sustainability Reporting in Nigeria

Nigeria has long sought to position itself as a leader in sustainable finance and climate accountability. At least, recent moves in policy circles suggest so. Among the burgeoning bodies seized with responsibility in this regard is the Financial Reporting Council of Nigeria (FRC). Its mandate includes ensuring that companies not only report their financial performance accurately but also disclose their Environmental, Social, and Governance (ESG) practices. With the adoption of the International Financial Reporting Standards (IFRS) Sustainability Disclosure Standards, Nigeria seemed poised to join the global ranks of nations integrating corporate reporting into national climate strategy.

On the surface, the regulatory framework looks sophisticated. But beneath, not enough is happening, really. This much is confirmed by SOStainability’s Sustainability Visibility Scan (SVS) series, published periodically on this ThisDay page. Past SVS editions reveal significant gaps in sustainability awareness, adoption, and reporting across sectors like the built environment, banking and finance, oil & gas, aviation, etc. The inevitable conclusion is that Nigeria’s sustainability ambition is far from matched by implementation, with obvious gaps in corporate awareness, stakeholder engagement, and inter-agency coordination.

A Look at the IFRS Framework and Why It Matters

The International Financial Reporting Standards (IFRS) have two subsets – S1 and S2. The first requires organizations to disclose sustainability-related risks and opportunities capable of affecting financial performance or future prospects. In practice, this connects environmental and social realities directly to revenue, cost, valuation, and strategy. IFRS S2 requires detailed climate-related disclosures, including emissions exposure, governance oversight, and resilience strategy. This means companies must not only describe climate risk but quantity and integrate it into their financial outlook. A critical question that arises is how these standards connect with Nigeria’s broader climate ambitions and frameworks such as the Nationally Determined Contributions (NDCs), the Energy Transition Plan, the Sustainable Finance Principles issued by the Central Bank of Nigeria (CBN), and the emerging green bond programmes led by the Debt Management Office. These parallel initiatives suggest that sustainability disclosure is becoming embedded across fiscal, financial, and regulatory institutions not only within accounting rules. But are they embedded and integrated in a coordinated manner?

Slow Adoption, Lazy Compliance

The FRC has already released detailed sustainability reporting guidelines and a roadmap for the phased adoption of IFRS S1 and S2. Public interest entities are expected to comply by 2028, while smaller firms have until 2030. The guidelines spell out expectations for governance oversight, risk management, and the disclosure of climate-related financial impacts. Yet, the reality remains that these standards are largely aspirational. Corporations, including multinationals, may be publishing sustainability reports, but smaller firms appear to lack the awareness, appetite, incentives, and capacity to produce and publish meaningful disclosures. The result is a fragmented landscape where adoption is slow and compliance lazy. Our SVS series has highlighted these disparities starkly. For instance, while some banks have adopted visible, accessible reporting practices, indigenous oil and gas companies and real estate firms remain largely absent from the reporting ecosystem. Even when reports exist, they often fail to provide actionable insights, instead offering generic narratives that satisfy minimal regulatory expectations. This raises a critical question: are sustainability reports in Nigeria fulfilling their intended purpose of informing investors, regulators, and the public, or are they merely ticking a compliance box?

Bridging the Gap with Inter-agency Coordination

A glaring issue in Nigeria’s sustainability reporting ecosystem is the seemingly weak integration of corporate disclosures with broader national climate and energy transition objectives. A recent ESG ratings report found limited transparency, insufficient reporting on climate-related risks (especially scope 3 emissions), and a lack of independent verification across Nigerian companies, all of which combine to weaken their connection to national and global climate goals.  Sustainability reporting, in theory, should serve as a bridge between corporate actions and policy outcomes, providing data to track progress toward emission reduction targets and energy transition goals. In reality, guidelines appear to be somewhat disconnected from the Climate Change Act, NDCs, the Energy Transition Office, and sectoral climate commitment. The fragmented framework indicates a slow transition from voluntary to mandatory compliance. The FRC roadmap should demonstrate explicit ties between sustainability reporting and national climate ambitions and frameworks like carbon budgets, adaptation plans, or the NCCC’s coordinated Action Plan. This gap is not merely bureaucratic in consequence. Without integration, the reports fail to influence investment in renewable energy, sectoral decarbonization, or climate resilience projects. Corporations may publish glossy reports while the country struggles to align corporate action with national sustainability objectives.

Greenwashing and the Journey to 2028 and Beyond

Although the FRC has issued warnings against deliberate greenwashing, misleading or superficial sustainability reporting, the reality is still largely aspirational. There appear to be no clearly enforced mechanisms to sanction misleading reporting. It would be useful to have a public record of meaningful enforcement actions against companies that produce low‑quality or misleading disclosures. The absence of enforcement actions or clear sanctions before the 2028 mandatory period weakens the incentives for companies to invest in quality reporting today. Without visible consequences for poor reporting, sustainability reporting risks becoming a box‑ticking exercise rather than a tool for meaningful transparency. It is acknowledged that the FRC has made efforts to raise awareness through workshops, training programmes, and public announcements. However, a lot more needs to be done in terms of awareness campaigns and capacity-building beyond the leadership and management cadres of corporate organisations. Many firms, particularly MSMEs, remain unaware or unbothered about their reporting responsibilities. Civil society groups, investors, and the broader public are equally limited in their understanding of the significance of sustainability reporting. The visibility of corporate sustainability reports is uneven, and many reports are difficult to access or understand. In some sectors, such as real estate and indigenous industrial companies, reports are outdated, incomplete, or nonexistent. The gap is clear: raising awareness among the top echelons is not sufficient if the broader corporate ecosystem and the public cannot engage meaningfully with the information. Inter-agency coordination, critical for ensuring that sustainability reporting contributes to national climate action, needs to be strengthened. The FRC appears to operate with minimal visible collaboration with the National Council on Climate Change, the Energy Transition Office, or other sector-specific public entities. Sustainability reports often stand alone as annual disclosures without structured linkage to Nigeria’s climate commitments under national policy frameworks. This indicates a gap in integration: reporting standards exist, but there is no effective monitoring mechanism to ensure those reports influence or align with Nigeria’s climate ambitions or energy transition planning. Without mechanisms to cross-verify, enforce, and integrate reporting data across agencies, sustainability disclosures risk remaining a fragmented exercise, disconnected from national climate priorities.

The Hard Questions

Nigeria’s regulatory framework for sustainability reporting is ambitious, but ambition alone is not enough. If the FRC is to succeed, it must confront uncomfortable questions. Are corporate leaders genuinely engaging with sustainability reporting beyond compliance? Can reports produced today meaningfully inform national climate and energy transition policy? And critically, how can inter-agency coordination be strengthened so that reporting feeds into real-world climate action rather than remaining an isolated regulatory requirement?The Financial Reporting Council of Nigeria has laid a foundation for sustainability reporting that aligns with global standards. But the implementation gaps in adoption, stakeholder awareness, capacity building, and inter-agency coordination threaten to render this foundation ineffective. Sustainability reporting should not be a symbolic exercise; it must be a tool that drives transparency, accountability, and meaningful climate action. Bridging the gap between guidelines and practice will require deliberate, sustained effort from regulators, corporations, civil society, and policymakers alike. Until then, Nigeria’s sustainability reporting framework risks being ambitious in name but limited in impact.

Spotlight

Now that NCCC has a budget line

Since its enactment in 2021, the implementation of the Climate Change Act has been on a gradual uptake. This is not uncommon with many new laws, which usually take time to percolate and become fully effective. More often than not, funding newly created or existing agencies is much of the challenge. For many years, the National Council on Climate Change (NCCC) secretariat, established barely a year after enactment of the law, has been constrained by funding.

This is why it is some good news that the NCCC, which coordinates the implementation of the law, has now been allocated about ₦651.03 million in the 2026 budget being processed by the National Assembly. While this amount may be insufficient given the scale of responsibilities the council has, it is a step in the right direction. The allocation is expected to cover areas such as personnel costs, overhead expenses, and capital projects such as climate-smart programmes, greenhouse gas tracking systems, resilience initiatives, advocacy, and awareness.

The NCCC has been at the centre of recent policy strides on climate action. In October 2025, for instance, the federal government approved the National Carbon Market Framework and operationalised the Climate Change Fund. This positions the body to actively activate significant climate finance nationally and internationally.

SOStainability calls on the National Assembly to guarantee improved and consistent funding for the NCCC, including increasing the 2026 allocation if possible. However, the agency must also now fully brace up to its responsibilities beyond optics and big-ticket policy statements. Public awareness and stakeholder engagement need to be urgently deepened.  This page will keep a keen eye on these matters.