By Oke Peter
The Securities and Exchange Commission, SEC has moved for the issuance of green and sustainable instruments in the Nigerian capital market, stressing that issuance of green bond will go a long way to assist in financing solar energy and other environmentally friendly infrastructure.
Director General of the SEC, Mr. Lamido Yuguda stated this during the Environmental, Social and Governance, ESG rundtable with the theme: “Unlocking value through ESG Investing”.
Yuguda said that beyond the Federal Government and corporate issuers, sub-nationals can also take advantage of the growing appetite to issue bonds to finance relevant environment-friendly projects, especially those that are revenue generating and with reasonable social impact.
He said, “Companies will also need to continuously disclose relevant information on their adoption of ESG principles. Such information will be critical for the investing public to make informed decisions about available investment choices and guide their asset allocation.
“Another important step in the journey of promoting sustainable investment principles is the development of robust sustainability ratings and indices to track companies’ ESG performance. This will further assist ESG conscious investors in making their investment choices. It will also simplify for investors and other stakeholders the process of analyzing information disclosed by issuers on sustainable finance.”
According to the SEC DG, given the global interest in ESG and the quantum of finance available to corporates and countries adopting the relevant principles, Nigerian issuers, governments and corporates, regulators, exchanges and other key stakeholders need to collaborate more to develop and issue necessary instruments to attract additional foreign capital into the country.
“With the enhanced focus on ESG considerations, much effort is now geared towards preservation of biodiversity, climate change mitigation and adaptation, inclusiveness, reduced inequality, human capital and communities’ development, among others. Given the important position of the financial sector in the economy, one can understand why these issues are accorded high priority in the sector and why the sector has begun to consider sustainability in its practices.
“Sustainable finance has become a global brand as the world stands strongly together to promote the transition to a low-carbon, more resource efficient economy and to build a financial system that spurs sustainable growth across nations.
“As we are all aware, finance has an enormous influence on sustainability; with players in the financial sector acting as catalysts for redefining the natural and business environments.
They help support the transition from exploiting nature to restoring and maximizing nature’s valued gifts. Investing in sustainable instruments therefore has far-reaching benefits, further justifying why ESG advocacy and practices are gaining more popularity” Yuguda stated.