The Financial Reporting Council of Nigeria’s amended roadmap and Sustainability Reporting Guideline 1 provide clearer direction for the adoption of IFRS Sustainability Disclosure Standards in Nigeria. The FRC has also continued to emphasise that sustainability information is increasingly relevant to competitiveness, financing and stakeholder confidence.
Why readiness cannot wait for the reporting deadline
High quality sustainability reporting depends on information that may not currently sit within the finance function. Energy use, workforce data, supply chain exposure, climate related risks and governance decisions may be held across several departments. If responsibilities and evidence are not organised early, the reporting process can become a late collection exercise with weak controls.
Four foundations to establish
- Governance: Define board and management oversight for sustainability related risks and disclosures.
- Materiality assessment: Identify the sustainability risks and opportunities that could reasonably affect the organisation’s prospects.
- Data ownership: Assign responsibility for each metric, source document, review and approval.
- Reporting controls: Build evidence, reconciliations and review procedures capable of supporting reliable disclosure and future assurance.
Connection with financial reporting
Sustainability information should not be developed as a separate public relations document. Assumptions about climate risk, capital expenditure, impairment, provisions, financing and business strategy may also affect the financial statements. Finance teams should therefore participate in the design of the reporting process from the beginning.
A practical first step
Management can begin with a readiness register. For each potential disclosure, document the responsible owner, existing data source, reporting frequency, control status, evidence available and identified gap. This creates a manageable implementation plan and helps the board see where judgement or investment is required.
Sources: FRC amended roadmap and SRG 1 announcement and FRC publications.
This article provides general professional information. Reporting obligations and timelines should be assessed for each organisation.