Keywords

Introduction

Sustainability Reporting is mostly used as a tool to present the economic, environmental and social impact of companies and to communicate their socially responsible behavior. Stakeholders assess a firm’s sustainability efforts via information made available to them. Cornelissen (2007) opines that the growth of a firm in the long run hinges on the perception of stakeholders about the Corporate Social Responsibility (CSR) behavior of the firm. In a certain sense, sustainability reporting can be regarded as the public expression of socially responsible behavior by corporations. Reporting therefore plays a crucial part in the sustainability agenda of organizations. Sustainability/non-financial reporting has received tremendous attention in the past few years following the collapse of giant firms like Enron, a situation which made it clear that financial reports are not enough to portray the actual performances of business entities (Nyor, 2021). Although there are several factors necessitating the adoption and implementation of sustainability/non-financial reporting, accountability, transparency, the need to keep stakeholders well informed, improving internal processes and persuading investors are the core reasons for embracing sustainability reporting (Umar et al., 2021). The 2007/2008 global financial crisis further highlighted the need for corporate sustainability, as businesses and financial institutions, in particular, sought to communicate the various strategies they had put in place to avert a repeat of the crises and to build a new sense of confidence in their stakeholders (Makarenko & Adu, 2018). Dumay et al. (2019) assert that the development of Integrated Reporting reflects how professional accounting bodies have reacted to the 2007/2008 financial crises and the SDGs by advocating for more disclosure of non-financial performance of corporations. The SDGs could serve as a unique framework for the financial industry, especially banks in developing countries to integrate sustainability principles into their operations and performance reporting. The publication of the SDGs is therefore expected to encourage banks to focus on financing sustainable projects and thereby become anchors to champion the progress toward the attainment of the 2030 global development agenda (Weber, 2018).

Performance disclosure in corporations, particularly multinationals have widened tremendously in the last two decades to cover economic, environmental, and social information, and sustainability reporting is now considered as a key factor that influences investment decisions especially in developed countries (Makarenko & Adu, 2018). However, sustainability reporting has not been given the needed attention in many Sub-Saharan African (SSA) countries (Ihlen et al., 2014).

This chapter seeks to discuss the effect of non-financial reporting regulations on sustainability information disclosure in the banking sector of SSA countries through case studies of Ghana and Nigeria. In effect, the key questions underpinning the chapter are: (1) What is the essence of non-financial reporting in corporations? (2) What is the effect of mandatory non-financial reporting regulations on sustainability reporting? (3) What has been the effect of the prevailing non-financial reporting regime on sustainability performance disclosure by banks in Ghana and Nigeria? And (4) What is the state of sustainability and non-financial reporting among banks in Ghana and Nigeria?

The Need for Non-Financial/Sustainability Reporting in Corporations

The relevance of non-financial or sustainability reporting goes beyond just the disclosure of non-financial information as it provides a unique opportunity for an organization to gather and present financial data, governance, environmental and social performance on a single platform (Abeysekera, 2013; Eccles & Saltzman, 2011). In a certain sense, sustainability reporting helps business organizations to look beyond shareholder interest to create a mutually beneficial engagement with all key stakeholders. This is crucial for organizational survival because the long-term performance of an organization is dependent on a strong relationship with all relevant stakeholders (Cai et al., 2011). Mammatt (2009) opines that sustainability reporting is more about strategic management than just information disclosure because it enables organizations to integrate environmental, social and governance (ESG) goals into their long-term business strategies for superior overall performance and business survival. Thus, periodic disclosure of non-financial data makes it possible for private corporations, public agencies and NGOs to express their vision and values beyond profits, to recognize and track economic and ESG performance as well as formulate policies and strategies to facilitate the efficient and sustainable management of the organization, and to manage change properly.

Elkington and Renaut (2010) argue that commitment to the periodic disclosure of non-financial information by an organization helps to enhance transparency, quality and access to reported information. Consequently, the communication of clear and transparent non-financial data engenders a continuous dialogue with all stakeholders of an organization. Such organizations as a result have a unique opportunity to detect and better manage potential organizational and reputational risks (Frias-Aceituno et al., 2013). More to the point, the tracking and reporting of non-financial information enables corporations to better appreciate the value they create for the different groups of stakeholders (Sun, 2012), be conversant with the value creation process, and to have better knowledge of how to structure an organization for seamless penetration into new markets (OECD, 2009). Non-financial information disclosure is often regarded as “outside-oriented”. Thus, it is geared toward systematically providing vital information relating to the mutually beneficial relationships between corporations/organizations and their key stakeholders. In other words, sustainability reporting provides a vital platform for the communication of non-financial performance and impacts to important stakeholders such as investors. To this end, Adams (2015) asserts that sustainability reporting does not only provide a detailed description of the non-financial performance for a given period, but also gives an account of how an organization seeks to create more value for its stakeholders in the foreseeable future. This is particularly useful for investors because empirical evidence suggests that two thirds of institutional investors globally pay significant attention to non-financial information in taking investment decisions (WBCSD, 2014). This implies that the quality and accessibility of non-financial information from a given organization could be critical to attracting institutional investors.

Non-Financial Reporting Regulations and Sustainability Reporting Nexus

The term non-financial reporting (sustainability reporting) refers to a situation where an organization formally discloses performance data on areas not related to their finances, including information about environmental, social and governance issues. Non-financial reporting usually covers those aspects of an organization that are not considered in the conventional financial reports. Non-financial or sustainability reports are relevant as they provide a transparent disclosure of performance data relating to ESG—environment, social, governance—issues within and related to business management to all stakeholders. It is becoming increasingly apparent that conventional financial reporting is not enough in this period where there is a shift from increasing shareholder value to creating shared value for all stakeholders (Porter & Kramer, 2006). In response, governments and regulatory institutions in both developed and some emerging economies have adopted different regulatory policies to compel businesses to publish sustainability reports in the last two decades. The adoption of non-financial reporting regulations is based on the premise that non-financial reports can help to enhance accountability and transparency between an organization and its stakeholders as well as facilitate improvement in internal processes and overall performance.

Non-financial reporting began as a voluntary phenomenon. But countries are gradually shifting from voluntary regulation to mandatory regulation and public policy. A large number of countries, especially in the developed world have in recent times introduced mandatory sustainability reporting or tightened regulations that were previously voluntary (KPMG, 2016). For instance, the European Union (EU) adopted Directive 2014/95/EU that requires the mandatory disclosure of non-financial and diversity information for large firms (with an average of 500 or more employees) in 2014 but voluntary regulations of non-financial reporting in the EU started at the beginning of the twenty-first century (European Commission, 2014). Under Directive 2014/95/EU, large companies are required to publish information related to issues such as environmental matters, social matters and treatment of employees, respect for human rights, anti-corruption and bribery, diversity on company boards (in terms of age, gender, educational and professional background) among others. The EU moved from providing voluntary guidelines for CSR reporting in 2001 to implement a legislative policy for non-financial reporting in 2014, on the premise that strict enforcement of non-financial regulations is required to promote the disclosure of environmental and social performance of businesses (European Commission, 2014). Maguire (2012) asserts that just as observed in the EU, there has been a well-established trend of countries adopting voluntary guidelines prior to the strict enforcement of state-mandated non-financial reporting guidelines. In effect, mandatory regulation could be regarded as a natural consequence of the voluntary guidelines to report on non-financial performance. From the foregoing, it is expected that the adoption of the Nigerian Sustainable Banking Principles in 2012 and that of the Sustainable Banking Principles of Ghana in 2019 could be the starting point of a process that will lead to the strict enforcement of non-financial reporting in the banking sectors of Ghana and Nigeria in the foreseeable future.

Review of Financial and Non-Financial Reporting Regulations in Ghana

Ghana came under British colonial rule for close to a century and as a result had its educational and financial systems modeled after that of Britain. Wijewardena and Yapa (1998) observe that most of the businesses established in Ghana in the later parts of the nineteenth century and the early days of the twentieth century were owned by British investors. As a result, a large number of top-level managers and accountants of business organizations in the country at the time were British. After the country’s independence in 1957, the need to formalize accounting and corporate reporting led to the enactment of Act 170 of parliament which established the Institute of Chartered Accountants, Ghana (ICAG) in 1963. However, the underlying legal blueprint that guides financial reporting and auditing for organizations in the country is the Companies’ Code of 1963 (Act 179). The Companies’ Code provides the accounting framework for all companies in Ghana (both private and public). The code provides regulations on reporting of financial performance and does not include integrated and sustainability reporting. Thus, it indicates standards for the preparation and publication of performance statement, financial position statement, cash flow statement, report of directors as well as auditor’s report. The code, by law, requires corporate institutions in the country to publish statutory financial statements annually in compliance with the Companies Act disclosure requirements as well as the Ghana National Accounting Standards (which follows the IFRS) (The Company’s Code, 1963). The Ghana Stock Exchange (GSE) after its promulgation in 1989 also provided guidelines to regulate the accounting practices of listed companies. Listed companies on the GSE are required to publish statutory financial statements in line with the Ghana National Accounting Standards (which have been aligned with the IFRS since 2007). Though the GSE reporting guidelines make provision for the disclosure of some non-financial information such as directors’ shareholdings, contracts involving the interest of directors, declaration stating the holders of each class of equity security, names of the first 20 highest shareholders for each class of equity security with their respective voting rights among others, it does not have strict regulations on non-financial reporting (GSE, 2018). The GSE guideline states that sustainability reports of listed companies in Ghana “may be contained in a separate section of the annual report but need not be audited”. In effect, there is no strict requirement by way of regulation of companies to prepare and publish sustainability reports as required in the case of financial reports (Assenso-Okofo et al., 2009). In the bid to ensure the conformity of Ghana’s financial reporting to International Accounting Standards (IAS), the Minister of Finance and Economic Planning launched the adoption of International Financial Reporting Standard (IFRS) in 2007 to champion the uniformity and standardization of accounting principles in the country. All listed companies, state enterprises, utility companies and financial institutions were mandated to prepare and publish their annual performance statements in line with the IFRS. However, after a decade since the adoption of the IFRS, compliance levels have been low owing to ineffective monitoring (Nyarku & Hinson, 2018).

Review of Financial and Non-Financial Reporting Regulations in Nigeria

Regulation of financial reporting in Nigeria started in 1960 when the Institute of Chartered Accountants of Nigeria (formerly Association of Accountants of Nigeria) was founded, which subsequently established the Nigerian Accounting Standard Board (NASB) in 1982 and saddled it with the mandate of prescribing guidelines for controlling the profession of accountancy in the country. In 1985, however, the NASB officially came under the control of the Nigerian federal government, and later backed by Act 22 of 2003, the NASB is mandated, among others, to prescribe and publish accounting standards, enforce compliance to the published standards and administer appropriate penalties to institutions that fail to comply (Dundun, n.d.). However, the NASB was repealed and replaced by the Financial Reporting Council (FRCN) of Nigeria in 2011. The FRCN was given the same mandate of prescribing standards compatible with professional financial statement preparation in Nigeria (Eke, 2018; Oseni et al., 2019). Meanwhile, in 1989, the need to harmonize financial reporting standards across the world led to the inauguration of the International Accounting Standards Committee—which later became the International Accounting Standards Board in 2001—with the duty to produce internationally accepted conceptual framework for financial reporting and presentation of standards referred to as International Accounting Standards (IAS); this was later modified and became known as International Financial Reporting Standards (IFRS) (Oseni et al., 2019). Following this development, Nigeria adopted the IFRS in 2010 and set the roadmap to applying it nationwide (Eke, 2018). The implementation was done in three phases. The Nigerian Security Exchange Committee (SEC) directed some particular publicly listed firms to adopt IFRS effective January 1, 2012 while all other public interest entities and Small and Medium Sized Enterprises (SMEs) were mandated to adopt IFRS by January 1, 2013 and January 1, 2014 respectively (Eke, 2018; Oseni et al., 2019).

It is apparent that corporate reporting regulations in Nigeria over the years have focused on the disclosure of the financial performance of firms and, hitherto, no formal regulation concerning the inclusion of sustainability performance in the annual reports of firms existed. In October 2012, following the launching of The Nigerian Sustainable Banking Principles (NSBPs), the Central Bank of Nigeria (CBN) issued a notice to the banks instructing them to include sustainability performance in their annual reports (Nwobu et al., 2017). Even so, this does not constitute a formal nation-wide adoption of sustainability reporting in Nigeria’s banking sector since it is not strictly enforced by the Central Bank of Nigeria (CBN). In 2013, moreover, ISO 26000—a standard on social responsibility launched in 2010 by the International Organisation for Standardisation—was adopted by the Federal Government of Nigeria. The ISO entreats all firms to act in consonance to best global practices in sustainability. Another reason for the adoption of ISO 26000 in Nigeria is to ensure that the philanthropic activities of firms are documented according to global standards in their reports (Ofoegbu & Asogwa, 2020). That notwithstanding, non-financial/sustainability reporting remained unregulated and at the desire of business entities (Ofoegbu & Asogwa, 2020). Starting in 2015, the Nigerian Stock Exchange (NSE) put in measures to allow all companies on the NSE to adopt and comply with sustainability disclosure guidelines. Key among these measures was the hosting of the Nigerian Capital Market Sustainability Conference which has birthed the so-called Sustainability Disclosure Guidelines (SDG), with a focus on four thematic areas: governance, economic, social and environment (Raghuwanshi, 2019). Regardless, the level of compliance is low as some banks feel that the guidelines are not in consonance with their ultimate goal of maximizing profit (Ofoegbu & Asogwa, 2020).

The State of Sustainability/Non-Financial Reporting Among Banks in Ghana

The accounting system of Ghana is still at the initial stage of the introduction of sustainability reporting and requires significant changes to existing regulations such as the companies’ code and the listing rules of the GSE (Nyarku & Hinson, 2018). The existing regime of CSR and sustainability disclosure in Ghana is voluntary and not strictly required by any regulation. Assenso-Okofo et al. (2009) report that even though the country completed the full adoption of IFRS for corporate disclosures in 2007, its implementation has been ineffective owing to weak monitoring and enforcement of compliance. In the country’s banking sector for instance, despite the significant growth in the last century, it still faces challenges such as ineffective corporate governance structures, wide interest rate spread, high rate of defaulting loans and low levels of non-financial information disclosure (Appiah-Konadu et al., 2016). An Asset Quality Review (AQR) undertaken by the Central Bank for all universal banks in 2015 and 2016 brought to light that a number of indigenous banks showed weaknesses in their operation with regard to weak corporate governance, inadequate capital and high levels of defaulting loans. Surprisingly, these weaknesses were not highlighted in the annual reports of the affected banks in the preceding years which could mean a deliberate attempt to deny stakeholders access to vital information (Bank of Ghana, 2018). The audit reports of the affected banks which were done by accredited auditing firms also failed to highlight these weaknesses and the auditing firms involved were made to pay penalties for their negligence in October 2019 (ICAG, 2019). In the 2018 banking sector report by the Bank of Ghana, it was observed that a greater percentage of the amount of non-performing loans for some banks that collapsed in 2017 and 2018 were given to people who were related in some way to owners and or top-level managers and board members (Bank of Ghana, 2018). In the case of Unibank for instance, the AQR discovered that “altogether, shareholders, related and connected parties had taken out an amount of GH¢5.3 billion from the bank, GH¢3.7 billion of which were neither granted through the normal credit delivery process nor reported as part of the bank’s loan portfolio and another GH¢1.6 billion granted as loans and advances without due process. The GH¢5.3 billion ($1.1 billion) taken out illegally constituted 75 percent of the bank’s total assets at the time it was closed down” (KPMG, 2018). It was further revealed that the directors of the collapsed banks failed to enforce bank accounting and corporate reporting systems and the external auditors also for some reasons failed to report on these misdeeds (Afolabi, 2018). Another interesting finding was the fact that chief internal auditors of the failed banks had compromised on their mandate because they had no independence from management or deliberately attempted to cover-up for executive directors during review processes (Afolabi, 2018). In effect, the general non-compliance with corporate governance principles and the lack of sustainability reporting contributed significantly to the collapse of some commercial banks and several savings and loans and microfinance companies between 2016 and 2019 (Owusu, 2019). Following the 2017/2018 banking crisis in Ghana, business analysts and various researchers have advocated that, a sure way to cultivate sustainable banking institutions in the country and to guarantee the interest of shareholders, depositors, the business community, employees is to get banks to act as good corporate citizens and to be required by regulations to present periodic sustainability reports (Ayangbah, 2017).

More to the point, Nyarku and Hinson (2018) reported that CSR and sustainability reporting in Ghana seems to be a concern for multinational banks and that indigenous banks usually do not regard CSR elements such as improving the quality of products, designing structures accessible for disabled customers, customer complaints, employee welfare and disclosure of non-financial information as crucial to their long-term growth and sustainability. In line with the preceding study, Amponsah-Tawiah and Dartey-Baah (2011) also found that multinational enterprises in Ghana mostly focus more on CSR initiatives than small and medium-sized indigenous enterprises do. The authors further reported that some banks are making the effort to integrate CSR initiatives with their corporate strategies to earn credibility, yet their reporting and disclosures appear to be problematic. Hinson et al. (2010) also observes that, as a strategy to build stakeholder relationships, some organizations use their annual reports and corporate websites to disclose CSR and non-financial information. Others also report CSR initiatives via newspapers, television broadcasts and billboards. He also found that companies listed on the GSE tend to give out more CSR information relative to their unlisted counterparts even though the GSE listing rules do not require the disclosure of non-financial information. The author however, emphasized on the fact that even those companies that make the attempt to disclose CSR initiatives and non-financial information mostly exhibit poor CSR communication content on their respective company websites. Isukul and Chizea (2017) in a study of CSR reporting in selected African countries reported that for most banks in Africa, disclosure of CSR and non-financial information seems to be a compilation and collation of disjointed information at the end of the accounting year just to give some impression to interested stakeholders instead of consciously integrating non-financial and sustainability issues into overall corporate strategies and performance reporting. They further observed that most banks in Ghana have not taken steps to adopt any of the international guidelines on sustainability reporting such as GRI Sustainability Reporting Standards, OECD Guidelines for Multinational Enterprises, UN Global Compact, ISO 26000 Guidance on social responsibility, the International Integrated Reporting Council (IIRC International Framework), the European Commission’s non-financial reporting Directive (2014/95/EU) among others. As a result, there seems to be no uniformity in the presentation of non-financial information among banks in Ghana. This is because the few banks that make the attempt to report non-financial results put together information they think will be useful to stakeholders without following any international standard that will guide them to present comprehensive non-financial reports for the use of all stakeholders.

The State of Sustainability/Non-Financial Reporting Among Banks in Nigeria

The Nigerian Sustainable Banking Principles (NSBPs) were adopted in 2012 through a collaboration between the Central Bank of Nigeria (CBN) and the Nigerian Bankers Committee. Prior to 2012, no regulation in Nigeria required banks to engage in sustainability reporting. In October 2012, the CBN issued a circular to encourage banks to incorporate the NSBPs in their operations. According to Michael & Oluseye (2014), the banking industry is one of the few industries in Nigeria where a large number of firms incorporate sustainability information in their annual reports. Lagos Business School Sustainability Center (2019) in a survey of Nigerian banks observed that sustainability is gradually becoming a matter of concern for banks in Nigeria. Within the last decade, there has been a significant rise in the adoption of sustainability initiatives and non-financial reporting in the banking sector of Nigeria and these developments have been influenced immensely by the adoption of the Nigeria Sustainable Banking Principles (ESG Advisory Associates, 2019). As at 2018, six (6) out of the twenty-two (22) commercial banks in Nigeria published a standalone sustainability/non-financial/CSR report. These are Access bank, Fidelity bank, FCMB, Stanbic bank, Union bank and Zenith bank. Citi bank, Ecobank, Guarantee Trust bank, Jaiz bank, Sterlin bank, United Bank for Africa-UBA and Wema bank disclosed sustainability information as part of their annual reports, whereas FBN and Standard Chartered bank disclosed sustainability information in their global group reports (Lagos Business School Sustainability Center, 2019). In all, about 70% of commercial banks in Nigeria disclose some form of non-financial information which is quite encouraging (ESG Advisory Associates, 2019).

Michael & Oluseye (2014) note that the common sustainability practices among banks in Nigeria encompass environmental, social, governance and economic practices in the form of Corporate Social Responsibility (CSR) initiatives, capacity building, energy saving practices, waste reduction and recycling, financial inclusion, employee relations, employee health and safety, non-financial reporting among others. Although Nigerian banks’ participation in environmental and economic sustainability practices are noticeable, many banks predominantly report on the social and governance dimension of sustainability (Michael & Oluseye, 2014). Nwobu et al. (2017) observed that although the reportage of environmental and social indicators by banks seems to be increasing over time, the majority of the banks do not have standalone sustainability reports. The author further noticed that the banks do not give much attention to some key environmental performance indicators such as the risk of climate change and its financial implications in their non-financial reporting. It is also noted that despite the efforts of the CBN to persuade banks to adopt the NSBPs, most banks still do not appreciate their roles in promoting critical sustainability issues such as environmental and social risk management in project finance, and the sustainable management of the supply chains they finance (Nwobu et al., 2017). Suffice to say that, though Nigeria is currently one of the leading countries in SSA in sustainability adoption in the banking sector (after making significant strides in the last decade), there is still more room for improvement in terms of getting more banks to produce standalone comprehensive sustainability reports. The reportage of environmental indicators among Nigerian banks in particular has not been encouraging (Nwobu et al., 2017). In the view of Nwobu et al. (2017), strict enforcement of the NSBPs and the adoption of international reporting standards such as GRI as framework for sustainability reporting is required to ensure that banks in Nigeria integrate all the dimensions of sustainability and produce standard annual non-financial reports.

Responsible Leadership and Non-Financial Reporting

Thus far, evidence from the literature suggests that there is a gradual shift in paradigm from solely maximizing shareholders’ value to engaging in sustainability practices and reporting the same. Effective leadership is therefore crucial in this context to encourage non-financial reporting among and within banks to further consolidate the progress that has been made so far. In general, leaders are influencers whose leadership largely determines the course of society. Hence, there is the need for both private and public leaders to incorporate non-financial reporting in the institutional ethos of their firms, be advocates of non-financial reporting, lead their followers and supporters to internalize non-financial reporting and adopt well-blended leadership styles to enforce adherence to non-financial reporting guidelines. In addition to other relevant leadership styles, leaders could adopt and appropriately blend sustainability leadership, responsible leadership and conscious leadership as identified by Fry and Egel (2021).

Conclusion

Evidence from Europe and other developed regions has shown that strict enforcement of non-financial reporting regulations has been the main driving force behind the observed high level of sustainability adoption and disclosure of non-financial information. SSA countries such as Ghana and Nigeria lag behind in the disclosure of non-financial information among corporations owing to factors such as limited enforcement capacity and weaker regulatory and legal systems (Okike, 2007). The corporate reporting framework in Ghana and Nigeria are based mainly on financial reporting regulations that do not make provision for non-financial information disclosure (Nwobu et al., 2017; Nyarku & Hinson, 2018). Although the introduction of the Nigerian Sustainable Banking principles and the Ghana Sustainable Banking Principles have raised awareness on the need for sustainability reporting among banks in both countries, the prevailing regime of non-financial information disclosure in Ghana and Nigeria is still voluntary and not strictly enforced. It is recommended that the corporate reporting regime in SSA countries should be revised to reflect the recent innovations in accounting around the globe especially in relation to sustainability reporting. There is also an urgent need to reform and retool national agencies tasked with the mandate of regulating, monitoring and enforcing accounting standards in SSA. An important lesson from the Ghana banking crises of 2017/2018 is the fact that integration of sustainability initiatives in Ghanaian banks particularly, the private indigenous ones and improvement in non-financial reporting are indispensable to maintaining the trust of the public in the banking sector. There is also the dire need for boards in banking institutions to be fully independent, resourced and strengthened to abide by global best practices so as to ensure that they effectively champion the diverse interests of the wider groups of stakeholders that are associated with banks, and to closely monitor and review the actions of management in line with the broad objectives of all communities of stakeholders, as well as take seriously their mandate of maintaining standard accounting practices and integrated reporting. More so, to engender increased adoption of sustainable banking principles, periodic sensitization and capacity building programs to retool managing directors of commercial banks should be considered by the central banks in SSA countries to ensure that banks appreciate the indispensable role they play in the sustainability of the planet and host communities. Policymakers need to provide concrete guidance on ESG disclosure and should seek to formalize such guidelines in mandatory stock exchange listing regulations. SSA countries with ESG listings as a voluntary requirement on their stock exchanges should also consider graduating to a mandatory regulatory requirement to enhance the level of non-financial reporting among listed companies.

Points to Ponder

  • To what extent do banks in your country practice sustainability reporting?

  • Is this important for other sectors apart from banking?

  • Are there any downsides to strictly enforcing non-financial information disclosure and sustainability reporting for the banking sector in Africa and could these possibly outweigh the upsides?

Actionable Recommendations

Private leadership

Public leadership

Management of banks should strive to establish functional sustainability departments and integrate ESG concerns in credit creation and operations.

Review corporate reporting framework to make provision for non-financial information disclosure.

Boards in banking institutions should be made fully independent, resourced and strengthened to abide by global best practices so as to ensure that they effectively champion the diverse interests of the wider groups of stakeholders that are associated with banks.

Ensure strict enforcement of non-financial reporting regulations in the banking sector.

Management of banks should organize periodic sensitization and capacity building programs to retool top-level managers with deeper knowledge in key performance indicators (KPIs) for sustainability.

Reform and retool national agencies tasked with the mandate of regulating, monitoring and enforcing accounting standards in corporations.