The Nigerian Exchange Limited has emphasized the significance of ESG compliance and data democratization in luring investors and improving stock liquidity in the Nigerian capital market.
This was said by the Divisional Head of Capital Markets at Nigerian Exchange Limited, Jude Chiemeka, during a panel discussion titled “ESG and Sustainable Finance; The Future of Investments,” which was co-hosted by the Securities and Exchange Commission and the Financial Centre for Sustainability in Lagos.
Chiemeka emphasized the Exchange’s focus on technology, which makes it easier for investors to obtain crucial data while emphasizing that NGX is a participant in the Sustainable Stock Exchanges Initiative.
He claimed that easy access to a variety of capital market products is essential, particularly for ordinary investors.
“Investors should also think about businesses that comply with ESG standards and offer clear, high-quality disclosures,” according to Chiemeka.
He emphasized the strong link between company performance and ESG reporting.
Companies listed on the Exchange that exhibit good ESG compliance frequently have easier access to cash, draw in a wider range of investors, and even have the ability to acquire money from overseas markets.
Companies that follow global best practices for corporate governance and achieve the highest capitalization and liquidity standards are represented on the NGX Premium Board.
According to him, compliance is not just an issue of status but also a sign of sustainable growth, making these businesses more appealing to both domestic and foreign investors.
According to the Director General of the SEC, Mr. Lamido Yuguda, Nigeria has the potential to influence positive change through the targeted promotion of environmental, social governance and sustainable finance in the financial markets, all while fostering national economic prosperity, preserving the environment, lowering inequality, and safeguarding the environment.
Yuguda emphasized the Commission’s resolve to uphold its commitment to champion the promotion of sustainable financing by developing the necessary rules and regulations, collaborating with stakeholders to foster advocacy and promote dialogue, and creating the necessary enabling environment for evaluating the advancements made and overcoming the challenges that still need to be overcome.
He stated that, among other things, “our Rules on green bonds have already permitted three issuances, so providing the necessary capital for green projects in areas such as power, water, and agriculture, and setting the stage for more to come in the near future.
“Additionally, in order to connect capital market participants’ disclosure obligations with the broader Nigerian Sustainable Finance Principles, we have also produced extensive sustainable finance standards.
“As we look to the future, we expect both the Nigerian bond market and the sustainable finance sector to continue to thrive. The Nigerian capital market will have a great chance to broaden its selection of products and offer more long-term financing to firms as a result.”
According to him, the world has reached a turning point where everyone must immediately take into account the devastating effects of climate change, inequality, conflict, and insecurity in relation to the need for responsible corporate behaviour to reshape our thoughts and actions around the future of our investment practices and ensure that they are in line with Environmental, Social, and Governance considerations.
According to Yuguda, all parties involved should provide their full support to any initiatives aimed at creating an economy that promotes sustainable business practices if they want a brighter future for themselves, their companies, and their communities.
