By Chioma Okehie
The Nigerian pension industry is yet to develop a policy document on ESG Principles, which would have been mainstreamed in the investment Regulations to guide operators in deploying the pension assets in environmentally friendly assets.
This notwithstanding, the industry appears to have embraced the global trend on sustainable investments through the window of FGN securities allowed in the current Regulations. The issuance by the FGN of its 1st N10.69 billion 5-Year Sovereign Green Bond in December 2017 to fund some environmentally friendly renewable energy projects, was a significant milestone. The investments by the pension industry in the Green Bond was in excess of N7.19 billion or 70%.
This volume points to the pension industry’s acceptance of sustainable investments as it forays into the future. However, there remains a lot to be done in the integration of ESG factors into investment decisions of Nigerian pension funds, particularly at policy level and capacity building.This was the main deliberation at the just concluded directors of fund operators held at transcorp Hilton on Tuesday, 15th of October 2019.
Esg remains a vital instrument in prudent administration of pension funds. This also is in line with the opening address given by the acting Director general pencom Aisha, Dahir-Umar when she said that caution need to be taken in the administration of pension funds, since the payment of retirement benefits still remains the critcal role of pension administrators. She said the Pencom funds has played a major role in the overall growth of Nigerian GDP because of its deployment in viable key sectors of the Nigerian Economy.