The Securities and Exchange Commission (SEC) has directed all public companies and significant public interest capital market operators in Nigeria to submit implementation plans for adopting international sustainability disclosure standards by October 15, 2026.

The directive is aimed at assessing the preparedness of regulated entities ahead of the mandatory implementation of the International Financial Reporting Standards (IFRS) Sustainability Disclosure Standards.

In a circular issued under the Investments and Securities Act (ISA) 2025, the Commission said the move supports the Federal Government’s commitment to improving sustainability reporting and ensuring disclosures are transparent, comparable and useful for decision-making.

The standards comprise IFRS S1, which sets out general requirements for disclosing sustainability-related financial information, and IFRS S2, which covers climate-related disclosures.

The Financial Reporting Council of Nigeria (FRCN), working with relevant stakeholders, including the SEC, developed a national adoption roadmap to guide the phased implementation of the standards across reporting entities.

Under the roadmap, early adoption was encouraged for accounting periods ending on or before December 31, 2023, ahead of the standards’ effective date.

Entities not yet subject to mandatory reporting may voluntarily adopt the standards for accounting periods beginning on or after January 1, 2024, through periods ending on or before December 31, 2027.

Mandatory adoption will begin for Public Interest Entities, including all public companies and significant public interest capital market operators, for accounting periods starting on or after January 1, 2028. Small and Medium-sized Entities (SMEs) will be required to comply for accounting periods beginning on or after January 1, 2030.

The SEC has instructed the affected entities to begin preparations in line with the implementation schedule established by the FRCN.

As part of the October 15 submission, each company or operator must provide an implementation plan outlining its readiness for the new reporting requirements and any anticipated implementation challenges.

The plan must cover governance arrangements for sustainability reporting, including board oversight; an assessment of gaps against IFRS S1 and IFRS S2 requirements; implementation steps and timelines; and the systems required for data collection and reporting.

It must also detail internal controls and assurance arrangements, staff training and capacity-building plans, the expected year of first sustainability reporting under the FRCN roadmap, and key challenges that could affect implementation.

The Commission said it would continue engaging regulated entities and monitoring compliance with the prescribed timelines as part of its oversight of financial reporting and corporate governance in Nigeria’s capital market.

The circular also clarifies that significant public interest capital market operators are entities responsible for facilitating clearing, settlement, trading or data functions in the market. These include, but are not limited to, exchanges, central securities depositories, clearing houses and trade repositories.

All affected entities are expected to comply with the directive and submit their implementation plans by the stated deadline.

Source: Securities and Exchange Commission (SEC Nigeria)