NIGERIA Law and Practice Contributed by: Yeye Nwidaa, Mariam Olayinka Akinyemi, Toluwalase Oliver-Jude and Adedoyin Odekilekun, Jackson, Etti & Edu
Digital Governance and Cybersecurity Oversight Boards are expected to play a more active role in overseeing digital transformation and manag - ing cyber-risks. This includes establishing clear governance frameworks around data protection and IT resilience. 2.2 ESG Considerations Materiality Assessment Conducting a materiality assessment is a fun - damental step in ESG reporting, as it enables companies to pinpoint the ESG issues that are most relevant to their operations, stakeholders and long-term value creation. This process helps organisations focus their reporting on areas that have the greatest impact on business perfor - mance and stakeholder expectations. Standardised Reporting Framework Companies are expected to adopt a globally recognised ESG reporting framework to ensure transparency and comparability in their disclo - sures. Nigeria has adopted the ISSB Standards, supported by the FRC’s Sustainability Disclo - sure Roadmap, which offers a streamlined and consistent foundation for ESG reporting. Governance Structure Strong governance is the backbone of effective ESG reporting, requiring clearly defined struc - tures that demonstrate active oversight by the board and senior management. Companies must disclose how ESG risks and opportunities are governed, including the roles and respon - sibilities assigned to leadership, the extent of board involvement in ESG oversight, and the accountability of management. Data Collection A key challenge for companies is the collec - tion and management of accurate and verifiable
cial Reporting Council of Nigeria (FRC) has con - tinued to promote the adoption of sustainability disclosures in alignment with the IFRS Sustain - ability Disclosure Standards. In March 2024, the FRC released a Sustainability Reporting Road - map, segmented into four distinct phases, as outlined below. Phase 1 – early adopters Entities that participated in this phase report - ed their sustainability-related information for the financial period that ended on or before 31 December 2023. Phase 2 – voluntary adoption (2024–2027) This phase covers accounting periods from 1 January 2024 to 31 December 2027. During this period, entities are expected to build internal capacity in preparation for mandatory adoption. Voluntary adopters are also required to undergo the Readiness Test Assessment before publish - ing any sustainability report. Phase 3 – mandatory adoption Public interest entities are expected to manda - torily adopt the IFRS Sustainability Disclosure Standards by 2028, while small and medium enterprises (SMEs) are expected to comply mandatorily by 2030. Phase 4 – government and government organisations Adoption will be considered following the finali - sation of public sector sustainability standards by the International Public Sector Accounting Standards Board (IPSASB). A review will deter - mine an appropriate commencement date for government entities.
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