Sustainable Finance involves financing/ investment decisions that considers not only financial returns but also the impact of investments on the environment, society, and governance practices.
Additionally, sustainable financing is the allocation of capital funds to businesses aimed at addressing environmental degradation and climate change while fostering Corporate Social Responsibility (CSR). This can be achieved through the issuance of Green Bonds.
Green bonds have become an important step toward a more sustainable future for many countries throughout the world, including Nigeria.
Green Bonds are fixed-income financial instruments issued by public, private or multilateral entities to fund projects with a positive environmental and economical impact.
The global green bond market has experienced exponential growth, with cumulative issuance surpassing $2.7 trillion by 2023. Meanwhile, a total of N36 billion ($95 million) worth of Climate Bonds have been issued in Nigeria, of which about 56 per cent have been allocated to solar energy projects.
Speaking on a topic tittled, ‘Sustainable Finance: The Role of the Corporate Trustee’, the associate director (head), Agusto Consulting Limited, Mr. Jimi Ogbobine said that sustainable finance, encompassing ESG investing, green bonds, and impact projects, is no longer a niche concept, saying that it is a rapidly growing global movement with significant implications for Nigeria’s economic development, environmental sustainability, and social well-being.
He emphasised that “corporate trustees, as custodians of trust assets and agreements, play a pivotal role in this global transformation. In Nigeria, Trustees also have the unique opportunity to catalyse the sustainable finance revolution, ensuring that investments drive positive change and deliver lasting value.”
The director general of Securities and Exchange Commission (SEC), Dr. Emomotimi Agama recently stated that “our planet faces challenges like value chain, resource scarcity, social inequality, economic instability, among others and there is need for a collective effort towards a more sustainable future for all of us.”
He urged Association of Corporate Trustee to take the lead enforcement expertise in sustainable finance and foster an investment environment that is both knowledgeable and accountable. He reiterated SEC commitment to champion sustainable financing in Nigeria.
Stakeholders emphasised that the actual impact of green bonds in Nigeria will be determined by the effective implementation of the financing strategy, the success of the projects sponsored, and the continued commitment to sustainability at both the governmental and corporate levels.