A new landmark Environmental, Social, and Governance (ESG) Policy Assessment Report has revealed major weaknesses in Nigeria’s banking sector, with leading financial institutions scoring an average of just 1.7 out of 10 in global sustainability standards.
The report was launched on Wednesday by the Fair Finance Nigeria Coalition, a group led by civil society organisations including Oxfam and the Civil Society Legislative Advocacy Centre, alongside partners such as BudgIT and Policy Alert.
The assessment evaluated four major banks: Access Bank, United Bank for Africa, Zenith Bank, and Standard Chartered against more than 400 international ESG criteria covering environmental impact, social responsibility, and governance transparency.
The findings show that sustainability and accountability remain weak priorities within Nigeria’s financial sector, with banks largely meeting only minimum compliance requirements rather than adopting meaningful ESG practices.
According to the report, the banks recorded particularly poor performance in key areas including tax transparency, climate responsibility, and environmental protection.
Tax transparency emerged as a major concern, with the institutions failing to provide adequate disclosure on revenues, cross-border operations, and exposure to tax havens.
Climate performance was also notably weak, with limited evidence of structured transition plans for reducing financing of high-emission sectors such as oil and gas.
Financing and environmental concerns
The civil society coalition has also highlighted the financial sector’s continued exposure to extractive industries. It noted that Nigerian banks provided approximately $15.5 billion in financing to oil and gas operations in 2022, while communities in producing regions continue to face environmental degradation and social disruption.
Despite this exposure, the report found limited commitments by banks to protect human rights, biodiversity, and local communities within their investment portfolios.
Call for systemic reform
Speaking at the launch, civil society organisations described the findings as a wake-up call for Nigeria’s financial system.
The coalition is urging regulators including the Central Bank of Nigeria, the Chartered Institute of Bankers of Nigeria, and the Bank Directors Association of Nigeria to initiate urgent reforms.
Recommendations include strengthening ESG disclosure rules, modernising Nigeria’s 2012 sustainability banking framework, and aligning financial sector practices with global standards.
The group also called for increased public accountability and stronger oversight of how banks finance environmentally and socially sensitive sectors.
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