As global investors increasingly scrutinise environmental, social, and governance (ESG) performance, a clear divide is emerging among Nigeria’s largest listed companies. While a handful of firms are embracing international sustainability standards and publishing detailed climate disclosures, others remain stuck with outdated reports and limited transparency, potentially risking investor confidence and access to capital.
The shift comes as sustainability reporting moves from voluntary corporate messaging to a regulatory requirement. In Nigeria, the Financial Reporting Council of Nigeria (FRCN) has mandated the adoption of International Financial Reporting Standards (IFRS) Sustainability Disclosure Standards. Concurrently, Nigerian Exchange Group (NGX) Regulation has introduced Sustainability Disclosure Guidelines aimed at improving transparency and comparability across listed companies.
National ESG compliance trails continental peers
Yet despite the growing regulatory push, Nigeria continues to trail leading African peers. According to the 2025 IPMC ESG Ratings Report released by PwC, which assessed more than 120 companies across the manufacturing, financial services, oil and gas, telecommunications, and professional services sectors, Nigeria ranks third in Africa behind Kenya and South Africa. The country possesses an overall ESG compliance performance level of approximately 32 percent.
The findings reveal a widening gap between ESG pioneers and laggards in Nigeria’s corporate sector. Among listed companies, MTN Nigeria has positioned itself as one of the country’s strongest ESG performers. The telecommunications giant released its seventh consecutive sustainability report for 2025 on May 4, 2026, disclosing measurable progress across environmental, social, and governance indicators.
The company reported a 6.4 percent reduction in Scope 1 and Scope 2 greenhouse gas emissions compared with its 2021 baseline, increased female workforce representation to 43.4 percent, directed 62 percent of procurement spending to local suppliers, and maintained a CDP Climate Change rating of B-. MTN Nigeria also disclosed that its network coverage now reaches 93 percent of the population, while its corporate social investment initiatives impacted over 663,300 lives with investments amounting to N3.5 billion.
Telecoms and banking pioneers drive integration
Tobechukwu Okigbo, Chief Corporate Services and Sustainability Officer at MTN Nigeria, said the company had deepened its sustainability integration during the reporting year. ‘During the year, we conducted a True Value Assessment of our social, economic, and environmental impacts from 2021 to 2024, completed a double materiality assessment, and hosted the inaugural Facts Behind the Sustainability Report at the NGX,’ Okigbo said. ‘Our focus remains clear: deepening ESG integration, empowering our people, and delivering measurable, net-positive outcomes. These results strengthen our conviction that responsible business is the foundation of lasting growth.’
The disclosures are particularly significant under IFRS S2 requirements, which focus on climate-related risks and emissions reporting. According to the Greenhouse Gas Protocol, Scope 1 emissions represent direct emissions from a company’s own operations, such as fuel combustion in company-owned assets, while Scope 2 emissions refer to indirect emissions arising from purchased electricity and energy.
Within the banking sector, Access Holdings has emerged as a sustainability reporting leader. A review of disclosures from Nigeria’s Tier-1 banks shows that Access Holdings is among the few institutions that explicitly state compliance with IFRS Sustainability Standards S1 and S2. In its 2023 Group Sustainability Report (published as an NGX document in December 2024) and its recently released 2024 report, the corporation detailed measurable environmental targets and outcomes. These include a 7.8 percent reduction in operational emissions, the deployment of 221 solar-powered automated teller machines (ATMs), a commitment to achieve carbon neutrality by 2035, and climate scenario analysis assessing the resilience of its lending portfolio under various climate risks.
Tier-1 lenders struggle with quantitative climate data
These disclosures place Access Holdings ahead of many of its peers in terms of alignment with emerging global reporting standards. IFRS S1 establishes a framework for sustainability-related financial disclosures, while IFRS S2 specifically focuses on climate-related risks and opportunities. International Sustainability Standards Board (ISSB) Chairman Emmanuel Faber noted the design intent behind the frameworks. ‘The ISSB Standards have been designed to help companies tell their sustainability story in a robust, comparable and verifiable manner,’ Faber said. The standards require companies to disclose how sustainability and climate issues affect business models, strategy, risk management, and long-term profitability.
Despite growing sustainability ambitions, many Nigerian banks still fall short on quantitative climate disclosures. Zenith Bank, Guaranty Trust Holding Company (GTCO), United Bank for Africa (UBA), and First Bank of Nigeria all reference sustainability frameworks such as the Task Force on Climate-related Financial Disclosures (TCFD), the United Nations Sustainable Development Goals, and the Central Bank of Nigeria’s Sustainable Banking Principles. However, most have yet to provide comprehensive climate-related metrics, Scope 1 to Scope 3 emissions data, or independent third-party assurance of ESG disclosures.
The distinction matters increasingly to investors. Under IFRS S2, companies are expected to disclose Scope 1, Scope 2, and Scope 3 emissions. Scope 3 emissions capture indirect emissions generated throughout a company’s value chain, including financed emissions, supplier activities, and customer impacts. For banks, financed emissions (Scope 3.7) often represent over 90 percent of their carbon footprint-a critical gap for Zenith Bank, GTCO, UBA, and First Bank. Without such disclosures, investors face difficulties assessing a company’s climate risk exposure and preparedness for a low-carbon future.
Corporate scorecards reveal sector-wide asymmetries
While all major banks have established board-level ESG governance structures and sustainability units, many remain in a phase of commitment and policy development rather than measurable implementation. However, Zenith Bank has expanded financing for renewable energy-focused small and medium-sized enterprises (SMEs). UBA continues to deepen financial inclusion through digital banking initiatives. First Bank has strengthened environmental screening for energy and infrastructure projects, while GTCO has expanded social impact lending programmes.
The manufacturing sector presents a similar picture of leaders and laggards. Unilever Nigeria strengthened its ESG credentials through its 2025 Sustainability Report, released on May 12, 2026. The company disclosed a 29 percent reduction in waste generation and a 5 percent decline in energy consumption compared with the previous year. It also reported onboarding 500 women living with disabilities across Nigeria, comprising 150 beneficiaries in Lagos and 350 in Kano.
Dangote Cement also continues to build momentum on sustainability in its first-quarter disclosures for 2025. The company improved its CDP climate and water ratings to B, expanded alternative fuel usage, strengthened waste heat recovery initiatives, and advanced its decarbonisation roadmap. These efforts build upon previous recognition in sustainability assessments, where the company achieved a 71 percent score in the Africa Corporate Sustainability Report (ADSR) rankings.
Outdated reporting threatens investor confidence
Nestlé Nigeria, in its 2025 sustainability report released on March 13, 2026, disclosed that it strengthened its ESG performance through carbon emission reduction, water conservation, energy efficiency, plastic-neutrality initiatives, and regenerative agriculture. The company also expanded community investments, delivering over 14 million litres of clean water, supporting youth training and scholarships, promoting gender inclusion, and enhancing ESG reporting through independent assurance.
In stark contrast, BUA Foods illustrates the challenges facing ESG laggards. The manufacturer’s latest sustainability report was released in October 2023 and covers 2022 performance, leaving investors with sustainability data that is now almost three years old. While the report highlighted positive achievements, including a 23 percent reduction in water usage intensity to 2.50 cubic metres per tonne and greenhouse gas emissions of 191 kilograms of carbon dioxide per tonne, the disclosures are increasingly viewed as outdated amid rapidly evolving reporting expectations. The absence of recent updates and limited alignment with IFRS S1 and S2 standards raises questions about transparency and comparability.
The construction sector shows a similar trend. Julius Berger Nigeria released its 2024 sustainability report on August 25, 2025. The company reduced total energy consumption by 9 percent, increased revenue by 25.6 percent to N556.7 billion, and invested over N555 million in education, healthcare, infrastructure, and social welfare projects. It maintained an industry-leading lost-time injury frequency rate below 1 for the 14th consecutive year and cut near-miss incidents by 45 percent. The company also sourced 90 percent of its N204.7 billion procurement spend locally, consumed 167,803 tonnes of construction materials under responsible sourcing policies, and strengthened anti-corruption compliance with zero reported incidents.
ESG compliance gaps drag foreign direct investment
The growing ESG divide comes at a critical time for Nigeria’s investment climate. According to the National Bureau of Statistics (NBS), foreign direct investment (FDI) inflows fell sharply to $135.08 million in the first quarter of 2026 from $357.80 million recorded in the previous quarter. This decline aligns with IPMC’s finding that Nigeria’s 32 percent ESG compliance ranks third in Africa, behind Kenya and South South Africa, suggesting sustainability gaps may be deterring long-term FDI. The decline occurred despite Nigeria attracting total capital importation of $10.37 billion during the period, driven primarily by portfolio investments and short-term financial flows.
Industry experts argue that stronger ESG performance could help reverse weakness in long-term investment inflows. IPMC Nigeria Chairman Robert Ade-Odiachi said poor ESG ratings signal governance failures. ‘Our objective is to raise these issues and let everybody see how we can carry out remedial action where we are so low with compliance,’ Ade-Odiachi said. ‘If you are low in the ESG rating, it shows that you are not being properly managed. Your governance is low. And certainly, if your governance is low, your returns on investment and stuff like that would be low as well.’ He added that foreign direct investors place significant emphasis on governance quality and sustainability practices.
Regulatory mandates loom as markets shift past CSR
Teasoo Consulting Limited Founder and Managing Partner Sarah Esangbedo Ajose-Adeogun noted that investors are increasingly integrating ESG metrics into investment decisions. ‘The implication is clear: transparency builds credibility, and credibility attracts capital.’
According to her, companies in sectors such as oil and gas and agriculture are already seeing benefits from stronger ESG disclosures through improved access to partnerships, funding, and export opportunities.
Similarly, ESG and Sustainability Professional Femi David Olawafemi believes companies must move beyond narrative reporting.
‘Investors are paying attention. Capital is increasingly flowing toward companies that can demonstrate resilience, not just responsibility.’ Olawafemi argued that sustainability disclosures should evolve into data-driven assessments that clearly demonstrate how climate and ESG risks affect a company’s financial future.
While the Central Bank of Nigeria’s Sustainable Banking Principles laid the foundation for integrating environmental and social considerations into financial decision-making, industry observers believe the next stage will involve independent assurance and audit of sustainability disclosures, similar to financial statements. This evolution is already influencing capital markets.
‘We want to make sure that NGX is one of the leading exchanges in attracting capital around sustainability,’ Nigerian Exchange Group CEO Temi Popoola said at the exchange’s sustainability forum. In essence, regulators need to mandate standalone ESG filings by 2027 with penalties for delays, while investors must score firms strictly on data recency and independent assurance.