By Goddy Egene
The Chief Executive Officer of the Nigerian Stock Exchange (NSE), Mr. Oscar Onyema has urged companies to embrace sustainability reporting, saying it has many benefits.
Speaking at the Nigerian capital market sustainability reporting seminar in Lagos, Onyema said at the NSE, they have a number of motivational factors for the promotion of sustainability reporting initiatives.
“Firstly, we understand that transparency builds trust which is a critical ingredient to a well-functioning market and economy. Secondly, it has been proven that strong environment social and governance (ESG) performance attracts the growing number of investors interested in the long term sustainability of their investments. Companies integrating ESG performance into their business strategy and operations show that the benefits range from improved resource efficiency, improved stakeholder relations and social license to operate, enhanced access to markets and investor confidence, as well as product and service innovation – all leading to enhanced competitiveness,” he said.
According to him, traditionally, stock exchanges have become the nexus for the interaction between investors, companies, policymakers and regulators. “Exchanges have played a crucial role in building transparent, regulated markets and promoting best practice in financial and corporate governance disclosure among listed companies. Today, exchanges are also well suited to help with the 21st century sustainable development challenge as they are uniquely placed to facilitate action as regards sustainable business, with a variety of measures at their disposal. These include listing requirements related to sustainability reporting, voluntary initiatives, guidance documents and training for both companies and investors, and sustainable investment products such as indexes that focus on ESG issues. There is a recognised need for enhanced levels of corporate transparency on ESG and as an exchange we are well positioned to encourage and even require listed companies to produce better sustainability reports that are issued consistently and with comparable information,” Onyema stated.
The NSE boss added that currently, a range of capital market stakeholders are increasingly recognising the need for more widespread and consistent ESG disclosure, and are looking to policymakers and regulators for potential solutions. “With more than a decade of voluntary initiatives and thousands of large companies producing ESG reports, there is an increased focus on efforts to ensure that improved sustainability performance spreads down from leading companies to the majority who are yet to adopt ESG disclosure practices,” he said.
Onyema disclosed that the NSE has held ourselves accountable to the highest standards in ESG disclosure, saying in 2013, it established a corporate social R=responsibility (CSR) Unit and instituted a strategy with goals through four thematic areas of community, marketplace, workplace and environment.
“Some of our initiatives include: the launch of a Corporate Governance Rating System CGRS, which is designed to evaluate companies based on the quality of their corporate integrity; corporate compliance; understanding of fiduciary responsibilities by their directors and their corporate reputation,” he said.