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The Nigerian Stock Exchange (NSE) has announced that its Sustainability Disclosure Guidelines (SDGs) has been approved by the Securities Exchange Commission (SEC). According to a statement released on Wednesday, the NSE said the approval of the guidelines is a fulfilment of its desire to champion sustainable capital market practices in Africa.

“The guidelines primarily provide the value proposition for sustainability in the Nigerian context," the NSE said. "It also articulates a step-by-step approach to integrating sustainability into organisations, indicators that should be considered when providing annual disclosure to the Exchange and timelines for such disclosures."

The NSE noted that companies listed on the Nigerian bourse may be at varying levels of understanding sustainability disclosure requirements and capacity to comply with the requirements. However, all listed companies are encouraged to adopt the practice of sustainability reporting. The guidelines will become effective from January 1, 2019.

“We are supporting the global agenda of green and sustainable finance, which is so critical for Africa," said NSE's Chief Executive Officer, Oscar Onyema.

The NSE said it recognizes that the promotion of Environmental, Social and Governance (ESG) principles can facilitate more meaningful engagement between investors and listed companies on ESG risks and opportunities.

“With continued global participation in our market, a shared framework of ESG principles with multi-stakeholder approach and metrics is imperative,” said Olumide Orojomi, Head of Corporate Communications at the NSE. “The Guidelines set out recommendations for good practice in thirteen thematic areas under four core principles in ESG reporting. With the launch of these Guidelines, investors can look forward to a consistent approach to ESG reporting from Issuers listed on the NSE.”

As a member of the United Nations Sustainable Stock Exchanges initiative and the World Federation of Exchanges, the NSE said it is committed to providing its listed companies with guidance on sustainability reporting. It has also taken steps to demonstrate its commitment through a number of pre-implementation activities.

In November 2015, the NSE hosted the inaugural Nigerian Capital Market Sustainability Conference. This served as a stakeholder engagement session to discuss the business value of sustainable investment, enhancing corporate transparency and ultimately performance on ESG issues, which contributed to the production of the draft of the SDGs.

On June 8, 2016, the NSE also held a Sustainability Reporting Seminar to apprise stakeholders on the SDGs, the reporting format and template, and its real value proposition. The draft SDGs was, then, taken through the NSE’s rule-making process, exposed to stakeholders’ comments and submitted to the SEC for approval.