SEC Mandates Sustainability Reporting Plans from Public Companies by October 15
The Nigerian Securities and Exchange Commission (SEC) has issued a critical directive requiring all public companies and significant public interest capital market operators to submit detailed plans for adopting the International Financial Reporting Standards (IFRS) Sustainability Disclosure Standards. This mandate, outlined in a circular dated September 23, 2026, under the Investments and Securities Act (ISA) 2025, sets a firm deadline of October 15, 2026, for these submissions. This move signals a significant step towards mandatory sustainability reporting, scheduled to commence for public interest entities on January 1, 2028.
The SEC’s requirement compels each covered entity to present a comprehensive implementation plan. This plan must articulate the entity’s strategy for adopting IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosures), alongside an assessment of anticipated implementation challenges. The directive aims to ensure robust preparedness for the upcoming mandatory reporting regime, providing approximately 15 months between the plan submission deadline and the official commencement date.
Key components expected within these sustainability readiness plans include governance arrangements with clear Board oversight for sustainability reporting, a thorough gap assessment against the requirements of IFRS S1 and S2, and a detailed implementation roadmap with defined timelines. Furthermore, entities must outline their internal control and assurance mechanisms, capacity-building and training initiatives, and specify the expected year of their first sustainability report in alignment with the Financial Reporting Council of Nigeria (FRCN) Roadmap. The SEC will actively monitor compliance and engage with regulated entities throughout this process, reinforcing its oversight of financial reporting and corporate governance.
This directive is underpinned by the FRCN’s roadmap for adopting the IFRS Sustainability Disclosure Standards, which facilitates a phased transition from voluntary to mandatory reporting. The International Sustainability Standards Board (ISSB) launched IFRS S1 and S2 in June 2023, with Nigeria being the first African nation to adopt these standards in the same month. While early adoption was encouraged for periods ending on or before December 31, 2023, voluntary adoption is permitted for entities not yet subject to mandatory reporting from January 1, 2024, through December 31, 2027. Mandatory reporting for Small and Medium-sized Enterprises (SMEs) is slated for periods beginning on or after January 1, 2030.
The SEC’s demand for individual preparedness plans marks a new emphasis on corporate accountability, particularly in light of uneven ESG readiness across sectors. Recent reports indicated that while some sectors, such as banking, are enhancing their ESG compliance, others, like insurance, lag significantly. The SEC’s proactive stance aims to prevent “greenwashing,” as previously cautioned by FRCN leadership, by ensuring that companies have concrete strategies and systems in place before the mandatory reporting deadline. The October 15 deadline applies to all listed companies and significant public interest capital market operators, including crucial market infrastructure providers such as exchanges, central securities depositories, clearing houses, and trade repositories.
