Nigeria Leads Africa in Implementing Sustainable-Finance Reforms – Report

Nigeria has become one of 34 emerging markets that are becoming a major force in driving development and fighting climate change, according to the first comprehensive Global Progress Report of the Sustainable Banking Network, an IFC-supported organization of banking regulators and associations.

The reported noted that success is driven by the various banking reforma introduced to expand sustainable lending by the Nigerian government.

Those 34 countries account for $42.6 trillion in bank assets—more than 85 percent of total bank assets in emerging markets. Some are wealthier than others, but all of them have made progress in advancing sustainable finance.

Eight countries—Bangladesh, Brazil, China, Colombia, Indonesia, Mongolia, Nigeria, and Vietnam—have reached an advanced stage, having implemented large-scale reforms and put in place systems for results measurement.

“This progress is an important step toward achieving the Sustainable Development Goals by 2030,” said Ethiopis Tafara, IFC’s Vice President for Legal, Compliance Risk and Sustainability.

“It shows that even the poorest countries can adopt sustainable finance reforms. The Sustainable Banking Network has demonstrated in a short time how much can be achieved when regulators, policymakers, trade associations and development institutions collaborate to advance sustainable finance.”

The report provides practical indicators and tools for countries to apply to their own domestic markets, regardless of their size or stage of development. This is important because it facilitates learning by all members and accelerates the pace of change.

It is based on an innovative results-measurement approach that has been agreed by all 34 member countries—a remarkable achievement that is breaking new ground for measuring progress at the global level.

“The intention of the report is to provide practical information to SBN member countries to help them develop public policy.

It is a useful guide not only for regulators and the governments, but also for banks, steering them towards what they could and should do from the bottom up,” said Edi Setijawan, Sustainable Finance Director, Indonesia Financial Authority (OJK), and a co-Chair of SBN Measurement Working Group that led the development of the unique methodology behind the report.

The report commended the endorsement of the Nigerian Sustainable Banking Principles by the Central Bank of Nigeria, which ensures a strong level of involvement from 34 national and international banks.

The Principles and their accompanying sector specific guidelines provide financial institutions with adequate and detailed elements for building their E&S policies. Nigeria stands out as one of the most advanced SBN members in the area of reporting.

Financial institutions are required to report and disclose their E&S policies and performance on a biannual basis.

To continue to advance the growth of sustainable finance, the report suggests that the Principles could integrate guidelines and definitions related to green financial flows and provide financial or non-financial incentives.

Eme Essien Lore, IFC Country Manager for Nigeria said, “IFC congratulates Nigeria for proactively establishing and implementing sustainable banking principles by becoming the first African country to become a member of the Sustainable Banking Network.

Today, Nigeria stands out as one of the most advanced Sustainable Banking Network members in reporting, requiring financial institutions to disclose their environmental and social performance on a bi-annual basis.