Sustainable finance has been viewed as a global trend, often associated with Europe, North America, and parts of Asia. In Africa—and particularly in Nigeria—the conversation around financing sustainability has been met with scepticism, as many believe the country’s economic realities make profitability a more urgent priority than sustainability.
Yet, Nigeria is facing some of the most pressing climate, social, and governance challenges in the world. From desertification in the north to flooding in the south, and from high unemployment rates to corporate governance failures, these challenges have direct financial consequences for businesses, investors, and the economy as a whole.
So, is sustainable finance a myth or an emerging reality in Nigeria? CSR-in-Action has been at the forefront of this conversation, engaging with stakeholders across the finance and business sectors. Our conclusion? Sustainable finance is no longer optional—it is a necessity for business resilience, investor confidence, and national economic stability.
The Myth: Nigeria Can’t Prioritise Sustainability in Finance
One of the biggest misconceptions is that Nigeria’s financial system isn’t structured for sustainable investments. Many believe that:
- The country’s economic volatility makes ESG investing too risky
- Sustainable finance is a Western-driven model that doesn’t fit Nigeria’s unique business landscape
- Local businesses, especially SMEs, cannot afford to prioritise sustainability while struggling with basic survival
However, the reality is that ignoring ESG risks is proving far more expensive:
Nigeria loses over $2.5 billion annually to environmental degradation—much of which could be mitigated through green investments.
Oil companies operating in Nigeria have collectively lost over $15 billion in production shutdowns due to host community conflicts—a direct result of governance and social failures.
Flooding and desertification are projected to reduce Nigeria’s GDP by 11% by 2050 if climate adaptation financing is not prioritised.
Nigeria cannot afford to treat sustainability as an afterthought. The financial sector has already started responding, paving the way for a more ESG-conscious economy.
The Reality: Sustainable Finance is Taking Root in Nigeria
Despite historical scepticism, Nigeria is witnessing a quiet transformation. The country has taken bold steps toward integrating sustainability into its financial system, and CSR-in-Action has been actively involved in shaping this evolution.
Here’s how Nigeria is proving that sustainable finance is a reality, not a myth:
1. Access Bank and the Rise of Green Banking
As Nigeria’s leading sustainability-focused bank, Access Bank has set a precedent for ESG-aligned financial models. The bank has implemented:
- Nigeria’s first Sustainability Banking Framework, aligning lending policies with ESG principles
A $50 million green bond issuance, the first corporate green bond in Africa, to finance renewable energy projects. - SME sustainability financing initiatives, providing capital for businesses that integrate ESG strategies.
CSR-in-Action has collaborated with Access Bank on sustainability training initiatives such as the C-PET workshop, equipping Civil Society Organisations (CSOs) and businesses with the skills to implement sustainability strategies. This partnership has shown that sustainable finance is not just theoretical—it is being embedded into Nigerian banking models.
2. The Growth of Green Bonds in Nigeria
Nigeria made history in 2017 by issuing Africa’s first sovereign green bond, worth ₦10.69 billion, to finance renewable energy and afforestation projects. Since then, the country has:
- Issued a second green bond worth ₦15 billion, demonstrating continued investor interest in sustainable finance
- Seen private sector players like Access Bank and North-South Power Company launch their own green bonds, proving that ESG-aligned financing is commercially viable
- Encouraged banks like the Bank of Industry (BOI) to develop climate-smart lending programmes targeting renewable energy businesses
These green financing instruments are redefining investment patterns in Nigeria, shifting from traditional extractive models to long-term sustainable investments.
3. Investors are Driving ESG Accountability
Global and local investors are no longer willing to fund businesses with weak ESG frameworks. In 2022 alone:
The Nigerian Stock Exchange (NGX) introduced ESG reporting guidelines, making sustainability disclosures a priority for listed companies.
The Central Bank of Nigeria (CBN) updated its Sustainable Banking Principles, ensuring that financial institutions integrate social and environmental risks into their lending practices.
Development finance institutions (DFIs) such as the African Development Bank (AfDB) increased their focus on funding ESG-aligned businesses, offering better loan conditions for sustainable projects.
CSR-in-Action has played a key role in bridging the gap between businesses and ESG investment opportunities, ensuring that Nigerian companies understand how to align financial growth with sustainability targets.
The Road Ahead: Overcoming Barriers to Sustainable Finance
While Nigeria is making progress, significant gaps remain in scaling sustainable finance across industries.
Some of the biggest challenges include:
Low ESG awareness among SMEs, limiting their ability to attract sustainable funding
Weak enforcement of sustainability regulations, leading to inconsistencies in ESG compliance
Limited access to affordable climate finance, restricting small businesses from transitioning to greener models
CSR-in-Action believes that multi-stakeholder collaboration is key. Businesses, financial institutions, and policymakers must work together to:
✔ Develop incentives for businesses to adopt ESG principles
✔ Ensure that sustainability policies are effectively implemented and monitored
✔ Expand financial literacy programmes to help SMEs integrate ESG strategies into their operations
Sustainable Finance is Nigeria’s Economic Future
The belief that sustainable finance is not feasible in Nigeria is outdated. The reality is that our financial future depends on it. From Access Bank’s green lending initiatives to government-backed green bonds, the shift is happening.
However, for Nigeria to fully capitalise on the benefits of sustainable finance, businesses must:
✔ Align financial decision-making with ESG principles
✔ Strengthen governance structures to attract responsible investment
✔ Drive innovation in climate-friendly business models
✔ Hold policymakers accountable for transparent, enforceable sustainability regulations
CSR-in-Action remains committed to championing this transition, ensuring that sustainable finance is not just a corporate trend but a fundamental pillar of Nigeria’s economic future.
Sustainable finance in Nigeria is not a myth—it is an evolving reality. The real question is: Will your organisation be part of the movement or be left behind?
📥 Join the conversation—connect with CSR-in-Action today to explore sustainable finance opportunities.
References
【1】 Access Bank’s Green Bond –https://www.accessbankplc.com/access/media/Media-PDF-Attachment/Green-Bond-2023.pdf
【2】 Nigeria’s Green Bond Issuance – https://ngxgroup.com/exchange/sustainable-bond-market/
【3】 NGX ESG Reporting Guidelines – https://ngxgroup.com/ngx-download/sustainability-disclosure-guidelines/
【4】 CBN Sustainable Banking Principles – https://www.cbn.gov.ng/out/2012/ccd/circular-nsbp.pdf