The source of this document is SEC.gov.ng
The Nigerian capital market plays a vital role in the country’s economic development. However, its activities can have negative environmental and social impacts. These SEC guidelines, based on the Nigerian Sustainable Finance Principles (NSFP), aim to promote sustainable finance practices among market participants.
Objectives
- Create a resilient, competitive, and sustainable capital market for economic growth and improved quality of life.
- Enhance corporate governance for transparent and sustainable practices.
- Support job creation, diversity, women’s empowerment, and access to financial products.
- Reduce environmental impact from capital market activities.
Principles
- ESG Considerations: Integrate environmental, social, and governance (ESG) factors into decision-making to minimize negative impacts. This includes efficient resource use, effective waste management, and upholding social standards.
- Collaboration and Capacity Building: Partner with stakeholders to raise awareness, build capacity, manage risks, and promote sustainable finance across the financial system.
- Financing Priority Sectors: Promote financing for crucial sectors like green finance, while ensuring alignment with ESG principles.
- Human Rights and Inclusion: Respect human rights, empower women economically, support job creation, and enhance financial inclusion.
- Reporting and Disclosure: Report on progress in implementing ESG principles and require supervised organizations to disclose relevant ESG information. Reporting should be clear, comprehensive, and comparable over time.
Benefits
- Improved risk management
- Reduced costs
- Enhanced reputation
- Access to new markets and finance
- Contributes to a sustainable economy
Who is Affected?
These guidelines apply to all regulated entities in the Nigerian capital market, including public companies.
Conclusion
The SEC’s sustainable finance principles aim to guide the Nigerian capital market towards a more sustainable future. By adopting these principles, market participants can contribute to a more resilient economy and a healthier environment.
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