Abstract
This research explores the complex landscape of Environmental, Social, and Governance (ESG) reporting within Nigeria's banking sector, analysing the tension between regulatory compliance and strategic value creation. Using secondary data from regulatory documents, corporate reports, and empirical studies published between 2020 and 2025, the study identifies key drivers, challenges, and prospects of ESG integration in Nigerian banking. The findings show that although regulatory pressures from the Financial Reporting Council of Nigeria's roadmap for adopting IFRS S1 and S2 standards have sped up ESG reporting adoption, significant implementation gaps remain. These include capacity constraints, data collection difficulties, and resource limitations, especially among smaller financial institutions. At the same time, the research provides evidence that Nigerian banks leading in ESG reporting, such as First Bank, Access Bank, and Bank of Industry, are leveraging their sustainability credentials to access green financing, boost stakeholder trust, and gain competitive advantages. The study finds that ESG integration in Nigerian banking remains mainly compliance-driven, but a noticeable shift towards strategic value creation is beginning among industry leaders. This research adds to the ongoing discourse on sustainable finance in emerging economies by proposing a conceptual framework that bridges the compliance and value creation divide, demonstrating how Nigerian banks can convert regulatory obligations into strategic opportunities. The study concludes with practical recommendations for policymakers, banking executives, and financial regulators to promote more meaningful ESG integration that meets regulatory requirements while also creating sustainable business value.
Keywords
ESG Reporting, Nigeria's Banking Industry, Regulatory Compliance, Strategic Value Creation, Sustainable Finance in Emerging Economies
Full Text
This research explores the complex landscape of Environmental, Social, and Governance (ESG) reporting within Nigeria's banking sector, analysing the tension between regulatory compliance and strategic value creation. Using secondary data from regulatory documents, corporate reports, and empirical studies published between 2020 and 2025, the study identifies key drivers, challenges, and prospects of ESG integration in Nigerian banking. The findings show that although regulatory pressures from the Financial Reporting Council of Nigeria's roadmap for adopting IFRS S1 and S2 standards have sped up ESG reporting adoption, significant implementation gaps remain. These include capacity constraints, data collection difficulties, and resource limitations, especially among smaller financial institutions. At the same time, the research provides evidence that Nigerian banks leading in ESG reporting, such as First Bank, Access Bank, and Bank of Industry, are leveraging their sustainability credentials to access green financing, boost stakeholder trust, and gain competitive advantages. The study finds that ESG integration in Nigerian banking remains mainly compliance-driven, but a noticeable shift towards strategic value creation is beginning among industry leaders. This research adds to the ongoing discourse on sustainable finance in emerging economies by proposing a conceptual framework that bridges the compliance and value creation divide, demonstrating how Nigerian banks can convert regulatory obligations into strategic opportunities. The study concludes with practical recommendations for policymakers, banking executives, and financial regulators to promote more meaningful ESG integration that meets regulatory requirements while also creating sustainable business value.