Regulate sustainability reporting, not practice, Nigerian institute urges FRC

The Sustainability Professionals Institute of Nigeria (SPIN) has called on the Financial Reporting Council of Nigeria (FRC) to focus its regulatory efforts on sustainability reporting rather than attempting to define or dictate sustainability practices. SPIN stresses the importance of clearly distinguishing between the practice of sustainability and the act of reporting on it.

The institute expressed concern over a growing tendency to equate sustainability reporting standards with the entirety of sustainability itself, suggesting this view incorrectly places it solely within the accounting profession's domain. SPIN clarifies that reporting is merely one aspect of sustainability and not the discipline itself. Sustainability, they explain, is a broad field encompassing governance, strategy, environmental stewardship, climate resilience, biodiversity, human rights, labor practices, stakeholder engagement, responsible investment, the circular economy, community development, and long-term value creation.

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Reporting is the final expression of sustainability performance. Organisations cannot credibly disclose what they have not first governed, measured, managed and improved.

SPIN asserts that reporting standards serve as a communication tool for aspects of sustainability work but do not constitute the work itself. "Reporting is the final expression of sustainability performance," the institute stated. They argue that organizations must first govern, measure, manage, and improve their sustainability efforts before they can credibly disclose them.

As Nigeria moves towards mandatory sustainability disclosures, SPIN emphasizes that the primary objective should be to achieve better overall sustainability performance, rather than simply producing more polished reports. The institute urges the FRC to regulate corporate reporting effectively without positioning itself as the arbiter of sustainability practice or competing with the professionals in the field.

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As Nigeria moves toward mandatory disclosure, our objective must be better sustainability performance, not merely better reports.