Environmental And Social Risk Management (Esrm) Nigeria Program

Background of the ESRM Nigeria Program

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:

  1. The absence of enforcement of E&S laws;
  2. The need for senior management support for commitment to E&S performance; and
  3. The absence of sector-specific guidelines and other guidance material to help bankers identify and manage related E&S risks.

The ESRM Nigeria project is the pilot for activities in Africa and pre-implementation activities started in 2012, with the objectives of increasing the uptake of E&S standards by FIs in Nigeria.

ESRM Nigeria Program Strategy

The ESRM Nigeria Program uses a three-pronged approach to achieve the objective of supporting the banking sector in integrating E&S best practices into its lending activities, namely:

Component 1:

Direct engagement with the regulator driving standards at the market level. This component enables the creation of the demand for E&S risk management standards and services in the market. The program partners with the Central Bank of Nigeria on implementation of this component.

Component 2:

Market level engagement with local consultants and supporting institutions (training institutions, associations, etc.) on E&S sustainability, and risk management. This component enables the creation of supply of technical E&S risk management capacity to service the demand created in Component 1. The program partners with the Chartered Institute of Bankers Nigeria, and the Lagos Business School on this component.

Component 3:

Awareness raising engagement with local stakeholders and information dissemination among financial institutions and other stakeholders. This involves training events for local banks and awareness raising on environmental and social risk management, sustainability best practices and other related topics through seminars, workshops and online tools and other activities to support regional knowledge sharing.

ESRM Program Partners

The program has partnered with key institutions for the implementation of the program activities.

Central Bank of Nigeria

The Central Bank of Nigeria (CBN) is the key regulator for sustainable banking in relation to all financial institutions and kicked off the drive for sustainable banking practices at a Sustainable Finance Week in 2011, to establish the need for a balanced approach to growth and development that is economically beneficial but socially relevant and environmentally sound. A joint commitment statement was signed by all the members of the Bankers’ Committee committing the industry to the development and implementation of the Nigerian Sustainable Banking Principles (NSBP) and in conjunction with the committee, sector-specific guidelines (agriculture, oil & gas, power) have been developed and adopted. The CBN has a Sustainability Committee to provide internal and external oversight for implementation.


The Chartered Institute of Bankers Nigeria (CIBN) was developed with the mandate of promoting banking education and professionalism among Nigerian bankers. The Federal Government Act No. 12 of 1990 gave the Institute control over the entry into the banking profession, setting of standards for bankers to comply with and overview of the maintenance of professional ethics through sanctions of erring members.

In order to embed the understanding of sustainable banking within the sector and improve implementation, the CIBN has partnered with the IFC to include Environmental and Social Risk Management in the banking chartership journey, as well as to develop a stand-alone certification. A co-operation agreement to this effect was signed in June 2019, following co-implementation of training activities on sustainable finance within the sector.

The Pan-Atlantic University’s Lagos Business School (LBS) is a strategic partner in the development of sustainable banking Practice in Nigeria, and through its Lagos Business School Sustainability Centre (launched in 2010), has made links between theory and practice on sustainability. This is done through research, course delivery and the hosting of business action platforms to enable constructive dialogue and collaboration between various stakeholders.

The IFC and LBS have developed training activities together for implementation at various levels of the banking sector.