Pre-implementation activities comprised support for the development of the Nigerian Sustainable Banking Principles (NSBPs) and sector guidelines. ESRM Nigeria has also provided technical training to a consultant network supporting the FIs and also raised awareness on sustainable banking at various levels within the market. A list of activities undertaken each year is provided below.
The Nigerian Environmental and Social Risk Management (ESRM) program, previously called the Environmental Performance and Market Development (EPMD) program, was formally initiated in 2013, building on the findings of a 2008 study conducted by IFC’s Independent Evaluation Group (IEG) on ‘Improving Results in Sub-Saharan Africa (SSA)’, which showed that Financial Institutions in the region did not achieve satisfactory Environmental, Social, Health and Safety ratings. The top three constraints to achievement were identified as:
The Nigerian economy is dominated by the extraction of petroleum, followed by agriculture as the closest industry by export volume. There are numerous environmental issues associated to both industries, including land degradation from traditional agricultural practices such as slash and burn, deforestation and erosion from land clearing, as well as pollution from manufacturing companies.
Nigeria’s banking sector plays a significant role in the country’s growth and is critical to the overall development of the economy. Sustainability was initially approached by the sector from a primarily corporate social responsibility (CSR) angle, with financial institutions supporting charitable initiatives and community engagement activities. However, following numerous significant global events such as the 2016 Paris Climate accord, Annual UN Climate Change Summits, and many international financial institutions resorting to green financing, sustainable investing has finally elbowed its way into mainstream financial intermediation.