Civil society groups demand overhaul of banking ESG policies

By Felicia Imohimi and Perpetual Onuegbu

Fair Finance Nigeria (FFNG), a coalition of civil society organisations, has urged Nigerian banks to modernise their Environmental, Social and Governance (ESG) frameworks to align with global standards and promote accountability in corporate finance.

The coalition made the call on Thursday in Abuja during the unveiling of its ESG Policy Assessment Report.

The News Agency of Nigeria (NAN) reports that the coalition comprises Oxfam, BudgIT, the Civil Society Legislative and Advocacy Centre (CISLAC), Connected Development (CODE), STEPS, and Policy Alert.

The coalition also called on financial regulatory institutions, relevant National Assembly committees, and bank executives to convene a multi-stakeholder roundtable to review and modernise the sector’s ESG framework.

Mr Auwal Rafsanjani, Executive Director of CISLAC, said the 2012 Nigerian Sustainability Banking Principles (NSBP) had become outdated, creating gaps that allow weak sustainability practices.

According to him, the coalition’s assessment showed that leading commercial banks scored an average of 1.7 out of 10 against global ESG standards.

“The nation’s first-ever comprehensive policy assessment evaluated four banks; Access Bank, Standard Chartered, United Bank for Africa (UBA), and Zenith Bank, across more than 400 international sustainability criteria.

“The results show a banking sector deeply exposed to high-impact risks, yet alarmingly opaque in its practices. The overall average performance across the assessed banks stands at a critically low 1.7 out of 10.

“The assessment showed relatively better performance in internal operational policies, particularly concerning labour rights, gender equality, and anti-corruption,” he said.

Rafsanjani added that the report revealed low transparency, especially in external financing commitments affecting host communities, climate protection, and national revenue accountability.

He noted that the banks recorded zero performance on tax transparency, stating that failure to disclose country-by-country revenues and financing activities in tax havens undermines global anti-money laundering standards.

“This severe level of opacity undermines the core principles of Anti-Money Laundering (AML) frameworks and Financial Action Task Force (FATF) guidelines, ignoring global standards designed to prevent the siphoning of vital public resources from developing nations,” he said.

Mr Tijani Ahmed, Country Director of Oxfam Nigeria, represented by Programme Manager Mr Henry Ushie, described the scores on tax transparency and climate action as unacceptable.

Ahmed said financial institutions must take responsibility for the environmental and social impacts of their investments beyond mere regulatory compliance.

“Institutions are reaping massive profits from high-impact sectors while refusing to be held accountable for the social and environmental footprints of their decisions.

“This is not just a disclosure gap; it is a failure of leadership in the financial sector,” he said.

According to him, although Standard Chartered recorded the highest score of 2.7, the performance largely reflects commitments made at its global headquarters, with limited clarity on local implementation in Nigeria.

Ahmed explained that ESG principles are global standards designed to ensure that companies and countries comply with environmental requirements across their operations and value chains.

He said that under the environmental component, emphasis is placed on climate change compliance and the extent to which organisations adhere to environmental standards.

According to him, organisations are expected to measure and understand their carbon footprints and adopt mitigation strategies aimed at keeping emissions within globally acceptable limits of about 1.5 degrees Celsius.

Ahmed added that sustainability also requires addressing broader environmental concerns, including biodiversity protection and ecosystem preservation, to ensure long-term environmental sustainability.

Dr Austine Okere, Lead Analyst of FFNG, said the assessment aims to strengthen ESG transparency, human rights compliance, and sustainable investment practices within Nigeria’s banking sector.

According to Okere, the assessment will help banks and other financial organisations create a self-reinforcing cycle in which they continuously improve compliance with standards, ultimately resulting in more sustainable investments and asset management globally.

He said the report recommended reviewing the 2012 Nigerian Sustainability Banking Principles to align with international standards and strengthening stakeholder engagement to improve ethical compliance and sustainability governance.

Mr Francis Useni, Special Assistant to the Chairman of the Economic and Financial Crimes Commission (EFCC) on Regulatory Compliance, commended the coalition and called for stronger collaboration between financial institutions and law enforcement agencies.

(NAN)