ESG in Nigeria: What Foreign Investors Need to Know in 2025

The regulatory backdrop

Three parallel developments are reshaping the ESG landscape for businesses operating in Nigeria:

1. CBN Sustainable Finance Principles The Central Bank of Nigeria's Nigerian Sustainable Finance Principles (NSFPs) now apply to all financial institutions operating in Nigeria. Lenders are required to incorporate ESG risk assessment into credit decisions — which means businesses seeking Nigerian bank financing must be able to demonstrate ESG compliance.

2. SEC Draft Sustainability Disclosure Framework The Securities and Exchange Commission has published a draft framework for mandatory sustainability disclosures for listed companies and large entities. While not yet in force, the direction of travel is clear: mandatory, standardised ESG reporting is coming.

3. DFI investor requirements The World Bank Group's IFC, the African Development Bank, the British International Investment (BII), and other development finance institutions now require IFC Performance Standards compliance as a condition of investment. For businesses seeking DFI co-investment or lending, this is already a hard requirement.

What this means in practice

For foreign businesses entering Nigeria, the practical implications depend on context:

If you are seeking DFI financing or co-investment: IFC Performance Standards PS1–PS8 compliance is non-negotiable. This requires a formal Environmental and Social Management System (ESMS), community engagement documentation, and ongoing monitoring and reporting. This is a significant undertaking that should begin before term sheets are signed.

If you are in a regulated sector (banking, insurance, capital markets): CBN and SEC requirements are tightening. Nigerian regulatory filings will increasingly require sustainability disclosures. Early adoption of a structured reporting framework (GRI or ISSB) positions businesses ahead of this curve.

If you are a multinational with group-level ESG commitments: Nigerian operations need to be integrated into your group's ESG data collection and reporting architecture. Local content compliance, community impact data, and environmental monitoring are the typical gaps.

The Nigeria-specific ESG issues

Several ESG factors are particularly material for Nigerian operations and are frequently underweighted by foreign entrants:

• Local content compliance (NCDMB requirements for oil and gas; emerging requirements in other sectors)
• Community engagement for operations affecting host communities
• Labour standards in supply chains — particularly for manufacturing and agribusiness
• Data protection under the Nigeria Data Protection Regulation (NDPR)
• Anti-corruption compliance (EFCC and ICPC exposure)

The integrated approach

The reason Ofie offers ESG advisory alongside legal and tax services is that ESG issues in Nigeria are overwhelmingly legal and regulatory in nature. Community engagement obligations, local content requirements, anti-corruption compliance, and governance frameworks cannot be addressed independently of the legal and tax structure. They are the same problem.

Businesses that engage separate ESG consultants — disconnected from their legal and tax advisers — consistently end up with recommendations that cannot be implemented within their regulatory and corporate structure.