The Nigerian banking industry is a major economic driver of the nation, accounting for 34.2% of the total equities market capitalization of the Nigerian Stock Exchange (NSE). According to checks by Nairametrics Research, thirteen banks listed on the Nigerian Stock Exchange (NSE) collectively spent N178 billion as personnel expenses during the first quarter of the year 2020. This shows a 9.5% increase when compared to N162.6 billion which the thirteen banks recorded during the comparable period in Q1 2019. The Nigerian banking sector is the second largest in sub-Saharan Africa behind South Africa. As of 2019, its total assets were worth 39.6 trillion Naira. In Q4 2020, the sector saw a over 3 billion transactions valued at N356.47 trillion positioning it as one of the largest sectors boosting the economy.

According to the National Bureau of Statistics, at Q2 2020, the sector had a staff strength of 95,888 showing that it is a leader in the employment of human capital in the country. In the Banking sector, social responsibility is paramount because issues of labour and employee rights are pertinent to the daily operations of banks. Ensuring that banks adhere to sustainable practices and human right codes is important to their social bottom line.

Key Regulations & Principles

The sustainability space in the banking sector is governed by the Nigerian Sustainability Banking Principles (NSBP) and was approved by the Bankers’ committee on July 14th, 2012. The principles aim to foster positive development impacts to society while protecting the communities and environment in which financial institutions and their clients operate. The Nigerian Sustainable Banking Principles cover nine principles: Environmental and Social Risk Management, Environmental and Social Footprint, Human Rights, Women’s Economic Empowerment, Financial Inclusion, Environmental and Social Governance, Capacity Building, Collaborative Partnerships and Reporting. Sustainability being a complex and cross cutting issue requires a coordinated approach as a result an inter-departmental sustainability Committee was also set up with ample membership from different CBN departments. When signing the principles, an organisation commits to a strict timeline of implementation, with clear expectations, deadlines and milestones to meet annually. The principles represent an impressive aim to drive change in a crucial sector of the economy. As of 2021, the NSBP has 34 signatory members who committed to its implementation in the sector.