Business
ESG Compliance, Future For Financial Service – FITC
The Managing Director, Financial Institutions Training Centre (FITC), Mrs. Chizor Malize, has emphasised that the future of Nigeria’s financial services industry will be shaped by substantial regulatory changes driven by the increasing importance of Environmental, Social, and Governance (ESG) factors.
Speaking during a chat in Lagos, Malize emphasised the influence of ESG considerations on the regulatory transformation in Nigeria’s financial services industry.
She stressed the importance of implementing enhanced reporting standards, integrating ESG criteria into risk assessments, and providing incentives for compliance.
Additionally, she noted that financial institutions are witnessing changes in investment patterns, operational adaptations, and evolving consumer demands as they adjust to these developments.
She noted that integrating ESG into operations is not only a regulatory obligation, but also a strategic advantage that enables institutions to excel in an increasing sustainable and responsible financial landscape.
To this end, she indicated that the government and the private sector are challenged to ensure the goal to fully decarbonise the economy, which has prompted sectors across the country to assess the ways in which they can alter their practices to become more climate-friendly and sustainable.
She noted that the financial services industry is also following suit, as banks are now embracing innovative approaches to address ESG challenges and to comply with the Securities and Exchange Commission’s reporting requirements.
She said, “financial service providers are considering offering products and services that support sustainable goals. These include sustainable funds that evaluate investments based on ESG criteria to measure their social and environmental impact, as well as sustainable bonds that facilitate fundraising for initiatives aimed at sustainable development and environmental and social objectives”.
In response, Mrs. Chizor Malize said FITC decided to establish its ESG institute to support financial institutions in meeting their ESG regulatory and reporting requirements.
She said the institute comes as the financial services sector is faced with a growing set of regulatory requirements, adding that it will support such organisations to build internal capabilities to implement company- wide culture for ESG understanding and helping clients to ensure that they remain compliant with the evolving regulatory environment.
According to her, FITC wants to help financial services institutions provide a range of ESG-centric products and services that extend far beyond investment products.
These, she added, include loans, which provide businesses with funding for environmental projects such as energy efficiency.
According to her, while the opportunities for financial institutions in the ESG area are vast, there is need for banks and other institutions to build capacities to explore.
She emphasised the importance of the financial services sector in leading the way towards a sustainable future, stating that FITC is committed to facilitating knowledge transfer to assist banks and other financial institutions in fostering innovation in sustainable financial services.
Additionally, she highlighted the necessity of repositioning the economy to address the challenges posed by the energy crisis.
As Nigeria confronts energy security challenges, she noted that it was important to assist the government in transitioning to a sustainable, green economy in order to address the risks associated with rising carbon emissions and climate change.
To this end, she said FITC is hosting sustainability/ESG Summit in Lagos today to provide fresh impetus as sustainable practices and responsible investments come to the forefront of economic growth discussions.