Overview of the Climate Change Act and IFRS roadmap
Introduced: November 18, 2021
Effective from: January 1, 2022 (core obligations); IFRS S1/S2 mandatory for FY 2028
Last modified: March 22, 2024 (FRC roadmap for ISSB adoption)
Region(s): Nigeria
About the Climate Change Act and IFRS roadmap
Nigeria’s Climate Change Act & IFRS roadmap establishes a legally binding national pathway to net-zero by 2060, requiring both public and private entities with 50 or more employees to formally engage in climate mitigation. Core obligations include appointing a climate officer, publishing an annual carbon-reduction plan, and filing emissions progress reports to the National Climate Change Council (NCCC).
Separately, the Financial Reporting Council (FRC) of Nigeria confirmed in 2024 that the country will phase in IFRS S1 & S2 for sustainability and climate-related disclosures. Adoption begins voluntarily between 2024–2027, and becomes mandatory for Public Interest Entities (PIEs) starting FY 2028, embedding ISSB-aligned data into financial reports.
Criteria for compliance
- All companies (public or private) with ≥ 50 employees, per Section 29 of the Act
- Public Interest Entities (PIEs), including:
- Listed companies
- Banks and financial institutions
- Pension funds
- Insurance firms
- Large private sector corporates
- SMEs will be phased in post-2030 based on thresholds yet to be defined by the Council
Compliance timelines
2022 onward
Annual emissions reduction plans and progress reports for all qualifying entities under the Act
2024-2027
Optional early adoption of IFRS S1 & S2
FY 2028
Mandatory reporting under IFRS S1/S2 for PIEs (filed in 2029)
FY 2030 onward
SMEs begin phased inclusion under NCCC guidelines
Disclosure requirements
Climate Change Act
- Organization-wide GHG inventory
- Carbon-reduction targets aligned with national climate goals
- Adaptation strategy and annual implementation updates
- Designated climate officer with oversight accountability
IFRS S1/S2
- Governance, strategy, risk management, metrics, and targets
- Mandatory reporting of Scope 1 & 2 emissions; Scope 3 if material
- Narrative and quantitative scenario analysis
- ESG data must be integrated into statutory filings
Key obligations
- Appoint a dedicated climate change officer (Act, s. 29)
- Submit annual emissions progress report to the NCCC
- Integrate ISSB-aligned data into financial filings starting FY 2028
- Establish internal tracking and reporting systems for emissions and targets
Third-party assurance
No immediate requirement under either the Act or IFRS S1/S2. The FRC roadmap targets limited assurance two years post-mandate (≈ FY 2030), with progression to reasonable assurance expected over time.
Penalties for non-compliance
Under the Climate Change Act
- Fines, enforcement notices, and potential facility shutdowns
Under FRC oversight (once IFRS S1/S2 is mandatory)
- Monetary penalties
- Legal liability for defective or missing disclosures
- Heightened investor risk and reputational consequences
