A brand new report has revealed that Nigeria’s main industrial banks are considerably underperforming in assembly international Environmental, Social, and Governance (ESG) requirements, recording a median rating of simply 1.7 out of 10.
The evaluation, performed by the Truthful Finance Nigeria (FFNG), the Coalition evaluated 4 main banks – Entry {Bank}, Commonplace Chartered, United {Bank} for Africa (UBA) and Zenith {Bank}—towards over 400 worldwide sustainability standards.
In line with a press release from Oxfam, it marks the nation’s first complete evaluation of banking sector compliance with international ESG benchmarks.
In line with the report titled: “How Are 4 (4) Banks in Nigeria Responding to World ESG Compliance Requirements?”, the low rating displays widespread gaps in vital areas akin to tax transparency, local weather accountability, and company accountability.
The banks scored 0.0 in tax transparency, indicating a failure to reveal country-by-country {financial} reporting or operations in tax havens, whereas climate-related efficiency stood at 0.9, highlighting continued financing of high-emission sectors with out credible transition plans.
The report additionally raised issues over weak or non-existent commitments to defending human rights and biodiversity inside banks’ funding portfolios and provide chains.
It famous that whereas the establishments proceed to generate substantial earnings from high-impact sectors, they’re largely avoiding accountability for the social and environmental penalties of their {financial} actions.
The coalition attributed the shortcomings partly to outdated regulatory frameworks, significantly the 2012 Nigerian Sustainability Banking Rules, NSBP, which it described as insufficient for addressing present international sustainability expectations.
Calling for pressing reforms, the FFNG Coalition—which incorporates BudgIT, Coverage Alert, CISLAC, CODE, STEPS, and Oxfam—urged key stakeholders such because the Central {Bank} of Nigeria, CBN, the Chartered Institute of Bankers of Nigeria, CIBN, and the {Bank} Administrators Affiliation of Nigeria, BDAN, to convene a multi-stakeholder roundtable to overtake the present ESG framework.
The group emphasised the necessity for Nigerian banks to maneuver past fundamental regulatory compliance and undertake strong, clear, and accountable sustainability practices aligned with international requirements.