Financial stakeholders have urged corporate trustees in the country to build capacity to serve investors who are interested in providing funds required to address climate change issues among others.
They stated at the 2024 Business luncheon of the Association of Corporate Trustee (ACT) in Lagos, with the theme, ‘Sustainable finance: The role of corporate trustees’.
Meanwhile, 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.
The global green bond market has experienced exponential growth, with cumulative issuance surpassing $2.7 trillion by 2023 from less than $40 billion about a decade ago. Between 2014 and 2023, Africa has issued $8 billion which represents a meagre 0.3 per cent of the cumulative $3 trillion raised across the globe in this 10-year period.
Currently, 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 at the event, the director-general, Debt Management Office (DMO), Ms. Patience Oniha said, “as we know, the trustees stand in the position where they really protect the interest of investors.
“As we expect these securities to come in large scale, not just from the government but from the private sector, we expect that the trustees should be able to provide the required services so that investors can be comfortable about them. As an association, you need to have that capacity to be able to deliver as those securities hit the market.”
Speaking as the arm of government that borrows, she said countries have adopted strategies and plans for managing things that are related to the environment, which was not just about climate change.
She noted Nigeria has been a signatory to international agreement on climate change, where countries come together to address this.
The director-general of Securities and Exchange Commission (SEC), Dr. Emomotimi Agama stated that “the theme of this year’s lecture is quite pertinent to say the least, our planet faces challenges like value chain, resource scarcity, social inequality, economic instability, and the other thing you learned a collective effort towards a more sustainable future for all of us.”
Represented by director, Market Development of SEC, Tunde Kamali 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.
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.”
Speaking on the choice of the theme, the president of ACT, Omolola Iyinolakan, said “we have been looking at the financial services sector, and see what is on the front burner, and try to address them from our own side as corporate trustees.”
She noted “over the last couple of decades, one of the trends which has involved is the concept of sustainability. And sustainability is not just imposed, it is the environmental, social, governance considerations into policy foundations across sectors, striving for the harmony between the planning, advancement, environmental preservation and social fairness.”