A Nigeria-Egypt Chamber of Commerce is planned for establishment by the end of 2025
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Nigeria finds itself at a critical point in its corporate governance history. As the first African country to formally adopt the International Sustainability Standards Board's (ISSB) landmark IFRS S1 (sustainability-related risks) and S2 (climate-related impacts) standards, a commitment made boldly at the COP27 in Egypt in 2022 , the country is now facing the harder, less glamorous work of turning policy ambition into institutional reality. With mandatory compliance for public interest entities set for fiscal year 2028, the window for genuine preparation is narrowing faster than many executives appreciate.
There is a big and dangerous distance existing between announcing compliance intent and actually achieving it. Nigeria's Financial Reporting Council (FRC) has structured a phased roadmap: voluntary adoption from 2024 through 2027, mandatory compliance from 2028 for public interest entities, and extended to SMEs by the year 2030. On paper, this appears generous. However, in practice, it is not.
Think of the experience of the European Union, which introduced the Corporate Sustainability Reporting Directive (CSRD) with similarly phased timelines. Companies that waited until the final year before their applicable deadline discovered that building reliable Scope 3 emissions data, which covers indirect emissions across the value chain alone, requires a minimum of 18 to 24 months of supplier engagement, data infrastructure investment, and internal capacity building. The lesson one that can be extracted from Europe is unambiguous: compliance is not a switch you flip; it is an organisational transformation you manage.
Nigeria's early movers tell the same story. MTN Nigeria, Seplat Energy, Access Bank, and Fidelity Bank published inaugural sustainability reports aligned with IFRS S1 and S2 for the 2023 financial year. Their experience has been instructive. These are institutions with sophisticated finance functions, existing ESG frameworks, and access to Big Four advisory support, and even they found the process demanding. For the broader universe of Nigerian listed companies, many of which are still in the awareness stage, the challenge is considerably steeper.
Part of the urgency problem comes from underestimating what these standards actually require. IFRS S1 is not a checklist. It demands that companies disclose all sustainability-related risks and opportunities that could possibly affect their cash flows, access to finance, or cost of capital across short, medium, and long-term horizons. IFRS S2 goes further, requiring specific climate-related disclosures including physical risks, flooding, heat stress, water scarcity , and transition risks tied to policy shifts, technology changes, and market repricing of carbon-intensive assets.
KPMG Nigeria's Tomi Adepoju has noted that a number of Nigerian board members and executives still question the relevance of sustainability to their business , a mindset that is not only strategically misguided but increasingly costly. Globally, jurisdictions representing over 57% of GDP are adopting or implementing ISSB standards. Companies that cannot produce credible sustainability disclosures will face growing friction accessing international capital markets, particularly as institutional investors embed ISSB-aligned screening into their due diligence processes.
Why does 2026 specifically matter, you may ask? Because meaningful IFRS S1 and S2 compliance for the 2028 reporting year, which covers fiscal year 2027, requires companies to begin collecting 2026 baseline data now. Assurance requirements add another layer of complexity: Nigeria's roadmap introduces limited assurance in the third year of reporting, this means data quality and internal controls must be audit-ready, not merely directionally accurate.
The analogy to financial reporting adoption is instructive. When Nigeria transitioned to IFRS for financial reporting over a decade ago, companies that started preparation two years early absorbed the learning curve gracefully. Those that started late faced restatements, qualified auditor opinions, and reputational damage. The sustainability transition is structurally similar but operationally more complex, because it reaches across business units, supply chains, and governance structures that financial reporting never touched.
The FRC's position, reinforced by Deloitte's analysis of the global ISSB rollout, is that companies should treat IFRS S1 and S2 as strategic instruments rather than compliance obligations. They force boards to confront climate risk exposure in financial terms, which is actually the kind of discipline that long-term investors reward. As the FRC's director put it, sustainability alignment signals long-term viability, and a sustainability-aligned company is ultimately a more investable company.
The corporate sector in Nigeria has a genuine first-mover advantage on the African continent. Squandering it by treating 2026 as a year to watch rather than a year to act would be a strategic error of considerable consequence. The deadline is 2028. The preparation window is now.
Written by:
*Dr Iqbal Survé
Past chairman of the BRICS Business Council and co-chairman of the BRICS Media Forum and the BRNN
*Sesona Mdlokovana
Associate at BRICS+ Consulting Group
Africa Specialist
**The Views expressed do not necessarily reflect the views of Independent Media or IOL.
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