FG will collaborate with NGX on climate disclosures, data, says minister

Sharon Ikeazor, minister of state for environment, says the federal government will collaborate with the Nigerian Exchange Limited (NGX) to provide investors with new tools that will enable capital reallocation.

Ikeazor said this on Friday while delivering a keynote address at the digital closing gong ceremony organised by the Nigerian Exchange Limited (NGX).

The event marked the close of NGX’s 2021 trading activities. 

According to her, Nigeria has shown its continual dedication towards achieving climate goals through several parameters and policies that have been established.

“The collaborative effort of NGX provides an enormous platform for investors to improve their understanding of climate change and crucially play their part in transitioning the Nigerian economy towards a sustainable net-zero future,” she said. 

“Nigeria has continued to show its commitment towards the attainment of the goals of the Paris Agreement of climate change with our revision of our Nationally Determined Contributions (NDCs) pre-COP26, and also the recent assent of the climate change bill by Mr. President.

“The climate change bill provides amongst other things the mainstreaming of climate change actions in the country and the establishment of the national council on climate change, to be chaired by Mr. President.”

She added that the federal ministry of environment will continue to help set up appropriate governance structures, reduce carbon emission, and enhance energy resources.

“We at the ministry of environment recently launched the Nigerian Deep Decarbonisation Project (DPP) as part of our emission reduction plan,” she added.

“The DPP is the first of its kind in West Africa. It is a national research and capacity building project designed to reinforce the capacity of local claims of experts and researchers for the scientific analysis of lower emissions developments pathways.”

Ikeazor expressed optimism that there will be a continuous collaboration between NGX and the ministry of environment to build a framework that will help issuers navigate climate disclosures, associated engagements with their shareholders and ultimately improve on the climate data available to the investment and finance community. 

“So the partnership with NGX will provide investors with important new tools to enable us to have our capital reallocation,” she added.

Temi Poopola, the chief executive office of NGX, said the green bond market is worth N55 billion ($135 million). 

According to him, NGX is committed to promoting sustainable financial inclusion for financial risks and opportunities surrounding climate change and other environmental issues.

“We are committed to fostering the growth of sustainable financial products which integrate the financial risks and opportunities associated with climate change and other environmental challenges,” he said.

“NGX has shown a strong commitment to sustainable finance over the years.

“In 2016, NGX collaborated with the ministry of environment and the Debt Management Organisation (DMO) to develop the green bonds market.

“This collaborative effort led to the issuance of the maiden N10.69 billion, 13.48%, 5 -year FGN green bonds in 2017 to fund a range of green projects. 

“A series 2 N50 million bond was issued in June 2019 and was well oversubscribed.”

He said these sovereign issuances paved the way for the issuance of corporate bonds, including Access Bank’s issuance of N15 billion 5-year fixed-rate senior unsecured bonds. 

Also, he listed as north-south companies issuance of the N8.5 billion 15-year guarantee fixed-rate senior green infrastructure bonds as well as N6.3 billion naira 10-year fixed-rate green bonds.

“These following issuances have further increased the investible instruments and deepened the Nigerian green bond market,” he said.

“It is noteworthy that the size of the green bond market is currently N55 billion naira, that is about $135 million.”