Director-General, Securities and Exchange Commission (SEC), Dr. Emomotimi Agama has called on capital market operators to adopt sustainable principles and practices in all their dealings.

He said the principles of sustainable finance open a new vista for all market intermediaries to take their businesses and client relationships to a new and higher level.

He therefore urged businesses to move  towards more sustainable and climate-friendly solutions.

Agama spoke at the 2024 Business luncheon of the Association of Corporate Trustee (ACT) held in Lagos, with the theme, ‘Sustainable finance: The role of corporate trustees’.

Represented by the Director, Market Development, SEC, Tunde Kamali, Agama said that the theme of this year’s luncheon wass quite pertinent.

“Our planet faces daunting challenges. Climate change, resource scarcity, social inequality, and economic instability demand a collective effort towards a more sustainable future.

“While we cannot over emphasise the pivotal role required of corporate trustees in facilitating sustainable financing, acting as intermediaries between investors and issuers, corporate trustees oversee assets and ensure compliance with legal and fiduciary obligations.

“As market professionals, trustees play a critical role of aligning investors’ interests with sustainable objectives, and by incorporating ESG criteria into investment strategies, they can guide capital towards projects and initiatives that promote sustainability,” Agama said.

He said all market operators have a collective responsibility of addressing the demands of the sustainability market, positioning the market ahead of the green supply curve while adhering to global standards and frameworks.

“As intermediaries, issuers, investors or regulators, we all have a role to play in facilitating the transition of economies towards sustainable and low-carbon growth.

“We can support this transition through our business activities by directing financial flows towards more sustainable and climate-friendly solutions, divesting from unsustainable practices, setting standards and frameworks, and integrating ESG into investment decisions and practices,” Agama said.

Agama pointed out that “so many opportunities lie in this new field with capacity to grow to a staggering $2.6 trillion market. As much as it is for the betterment of our planet, so much wealth can be made along the way.”

SEC DG cited that “according to a 2023 report by Deloitte, the demand for sustainable investing is not yet fully met by investment advisors. Based on multiple surveys, investors have a strong interest in sustainable investing but want more support from their advisors.

“According to the report, the demand for sustainable investing remains largely unfulfilled by investment advisors. By implication, this is a clear indication that there are lots of untapped opportunities that financial intermediaries can leverage. It is also an indication of the gap required to be filled by intermediaries and the opportunities being thrown away.”

Agama therefore urged stakeholders to move beyond the traditional role of intermediaries, especially in this area of sustainable finance adding that as responsible stewards, they  have significant influence in shaping a landscape conducive to positive change.

“Embrace your role as trustees by acting as guardians and gatekeepers of sustainability. Implement robust mechanisms to monitor the social and environmental impacts of investments, ensuring that deployed capital genuinely drives positive global change. Combat greenwashing, where investments falsely claim sustainability without real impact.

“The Association of Corporate Trustees should take the lead in fostering expertise in sustainable finance, fostering an investment environment that is both knowledgeable and accountable”.

He assured that the SEC stands firm in its commitment to champion sustainable financing as the Rules on Green Bonds have already facilitated several issuances, providing essential funding for green projects in sectors such as power, water, and agriculture.

“Moreover, we have developed comprehensive sustainable finance guidelines and disclosure requirements for capital market operators, aligning them with the Nigerian Sustainable Finance Principles,” he added.

Speaking at the event, the director-general, Debt Management Office (DMO), Ms. Patience Oniha said trustees stand in the position where they really protect the interest of investors.

“As we expect these securities to come in large scale, not just from the government but from the private sector, we expect that the trustees should be able to provide the required services so that investors can be comfortable about them. As an association, you need to have that capacity to be able to deliver as those securities hit the market,” Oniha said.

The president of ACT, Omolola Iyinolakan, noted that “over the last couple of decades, one of the trends which has involved is the concept of sustainability. And sustainability is not just imposed, it is the environmental, social, governance considerations into policy foundations across sectors, striving for the harmony between the planning, advancement, environmental preservation and social fairness.”