Integrating sustainability principles in Corporate Reporting: Gains and pains for professional accountants
For decades, Nigeria has suffered the consequences of neglecting its environment, both from government inaction and from industries whose operations have scarred the land, polluted the air, and contaminated the water. A glaring example is the Niger Delta, where environmental degradation has dominated public discourse for nearly half a century. The wilful neglect of this vital ecosystem has fuelled unemployment, militancy, kidnappings, and economic instability, leaving deep scars on communities that once thrived on agriculture and fishing. The social and economic consequences of this environmental decay are a painful reminder that ignoring sustainability has a price.
It was against this backdrop that sustainability reporting emerged as a vital framework to promote accountability and restore balance between economic growth and environmental responsibility. The principle of sustainability reporting extends beyond profit; it requires organisations to communicate their goals, progress, and performance in relation to three interconnected pillars: Environmental, Social, and Governance (ESG). These principles focus on how businesses impact the natural environment, engage with employees and host communities, and uphold transparency and ethics in governance.
The ESG model, in essence, represents a company’s commitment to operate responsibly. It requires measurable action—reducing waste and emissions, supporting social equity, and fostering sound governance. For stakeholders such as shareholders, employees, regulators, customers, financial institutions, and host communities, ESG reporting provides insight into how organisations balance profit with purpose. It has become a strategic tool for building trust and enhancing long-term value.
In recent years, the growing emphasis on ESG investing has further accelerated this movement. Investors now consider how well companies perform in these areas before committing funds. A strong sustainability record is not merely a moral advantage—it is a business imperative that attracts capital, builds brand reputation, and ensures resilience in an increasingly regulated global market.
Institutions such as the Institute of Chartered Accountants of Nigeria (ICAN) and the Institute of Public Management Consultants (IPMC) have been at the forefront of promoting sustainability reporting in Nigeria. The IPMC recently conducted ESG ratings focused on banks and insurance firms, spotlighting the top performers. The five leading banks included Zenith Bank Plc, Access Bank Plc, Stanbic IBTC Bank, Fidelity Bank Plc, and UBA Plc, while the top insurers were AXA Mansard, Custodian & Allied Insurance, Allianz Nigeria Assurance, Coronation Life Assurance, and Custodian Life Assurance. These recognitions are more than symbolic; they showcase the growing acceptance of ESG principles within Nigeria’s corporate landscape.
Similarly, the ICAN/NGX Corporate Reporting Awards 2024 celebrated excellence in sustainability and financial reporting. Seplat Energy was recognised as Best in Sustainability Reporting for its leadership in environmental responsibility and governance. Airtel Africa earned the Gold Winner Award for Financial Reporting, while Dangote Cement received the Platinum Award for its commitment to accountability and transparent corporate disclosure. These milestones affirm that Nigerian companies are gradually embedding sustainability into their strategic and financial DNA.
The benefits of integrating sustainability principles into corporate reporting are extensive. For one, it promotes good corporate governance by aligning business objectives with broader social and environmental goals. It enhances transparency, enabling stakeholders to make informed decisions based on clear disclosures of a company’s ESG performance. From a risk management perspective, it helps professional accountants and business leaders identify potential threats such as climate-related risks, regulatory non-compliance, or reputational damage before they escalate. Moreover, companies with robust sustainability frameworks often enjoy better access to capital, attract socially responsible investors, and strengthen stakeholder loyalty.
However, these gains come with challenges, particularly for professional accountants who are now expected to play a central role in this evolving landscape. Collecting and verifying sustainability data can be time-consuming and technically demanding, requiring new skills in data analytics, environmental metrics, and social impact measurement. The absence of a universally standardised framework for sustainability reporting also poses a challenge, as companies must navigate multiple guidelines and evolving regulations. Providing assurance on sustainability reports can be complex because ESG factors often involve subjective judgements rather than purely financial data. Furthermore, accountants must balance the diverse expectations of stakeholders, from investors seeking returns to communities demanding accountability.
Despite these hurdles, professional accountants are uniquely positioned to drive the integration of sustainability principles into corporate reporting. Their training in ethics, transparency, and accountability aligns naturally with the goals of sustainability. By adopting sustainability frameworks and ensuring rigorous reporting standards, accountants can help companies move from mere compliance to genuine impact, bridging the gap between financial integrity and environmental responsibility.
Ultimately, integrating sustainability principles into corporate reporting is not a passing trend but a necessary evolution in modern business practice. It expands the narrative of corporate performance beyond financial profit to include environmental stewardship, social responsibility, and ethical governance. For professional accountants, this shift represents both an opportunity and a responsibility, to ensure that corporate success is measured not just by what companies earn, but also by how they contribute to a sustainable future.
Dr Kingsley Ndubueze Ayozie, FCTI, FCA, is a public affairs analyst and chartered accountant. He writes from Lagos.