Companies should prioritize environmental and social governance to drive expansion, according to NECA's guidance

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The Nigeria Employers’ Consultative Association has urged businesses, particularly Micro, Small and Medium Enterprises, to embrace Environmental, Social and Governance principles to improve competitiveness, attract investment, and achieve long-term growth amid rising global and domestic economic pressures.

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The Director-General of NECA, Mr Adewale-Smatt Oyerinde, stated this on Friday in Lagos while speaking during the official launch of the Environmental, Social and Governance implementation guide for Micro, Small and Medium Enterprises in Nigeria.

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Oyerinde added that the ESG implementation guide was developed in collaboration with the International Labour Organisation.

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“We all know the issues involving the United States, Iran, and Israel, which have caused a lot of disruptions. So the natural expectation is that we are not isolated from those challenges. So whatever they feel there, we will feel here. It will be fake news or a false belief if we think flights here will not be delayed by this lack of jet fuel. It will be affected,” Oyerinde stated.

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Oyerinde admitted that MSMEs are facing some regulatory challenges. “Walk around the areas where MSMEs are predominantly located, and you will probably see the context of the challenges they are facing with local governments, regulated and unregulated fees, and levies that they pay. All those are big challenges that they are going to face,” he added.

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On the launch of the ESG guide, Oyerinde explained that the guide comes at a critical time for businesses, particularly MSMEs in Nigeria. According to him, ESG considerations are no longer optional but have become essential requirements for competitiveness, sustainability, and long-term business success.

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“From investors and regulators to consumers and global value chains, there is a growing expectation for businesses, regardless of size, to demonstrate responsible and sustainable practices,” he said.

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Oyerinde stressed that while large corporations may have the capacity and resources to navigate ESG requirements, “many MSMEs, which form the backbone of Nigeria’s economy, often face challenges in understanding where to begin, what is required, and how to implement ESG principles in a practical and cost-effective manner.”

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“It is in response to this gap that NECA, in collaboration with our esteemed partner, the International Labour Organisation, developed this ESG Implementation Guide for MSMEs in Nigeria,” Oyerinde stated.

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He highlighted that the guide is designed to be practical, accessible, and action-oriented, adding that it provides MSMEs with clear guidance on understanding ESG concepts in simple terms, “implementing sustainable business practices, meeting emerging reporting expectations, identifying relevant ESG risks and opportunities, and positioning their businesses for improved access to finance and market opportunities.”

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The NECA DG highlighted that beyond compliance, the guide underscores a critical message. Oyerinde, while reiterating that ESG is not just about meeting requirements, added that it is about unlocking value.

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He pointed out that businesses that integrate ESG into their operations are better positioned to attract investment and financing and compete effectively in both local and international markets.

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“For Nigeria, supporting MSMEs to adopt ESG practices is also central to achieving inclusive economic growth, job creation, and sustainable national development.

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“At NECA, we recognise that the transition to sustainable business practices requires more than guidance; it requires continuous engagement, capacity building, and collaboration. We are therefore committed to supporting our members and the wider business community through training, advisory services, and strategic partnerships that will drive ESG adoption across sectors,” he said.

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He urged all stakeholders, including government, financial institutions, development partners, and the private sector, to work together in creating an enabling environment that supports MSMEs.

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Oyerinde advised that the guide will assist MSMEs across the country to start, improve, and scale up their sustainability journey in a way that is practical and beneficial.

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