An Analysis of CBN's 'Sustainable Banking Principles' in Nigeria

This report assesses the sustainability practices within the Nigerian financial system, focusing on the 'Sustainable Banking Principles' of the Central Bank of Nigeria (CBN). The introduction highlights the integration of social, environmental, and governance criteria into traditional banking. The report examines the triggers for sustainability approaches, including reputational benefits and regulatory requirements. It then delves into the CBN's specific sustainability principles, such as integrating environmental and social considerations into business decisions, minimizing negative impacts, respecting human rights, and promoting women's economic empowerment. The analysis covers the CBN's sustainable banking model, initiatives, and its approach to maintaining these principles, including minimizing negative impacts on local communities and aligning with community investment initiatives. The conclusion emphasizes the CBN's commitment to implementing sustainability guidelines and promoting responsible lending. The report references several sources to support its findings.

Sustainability practices in the Nigerian
financial system: An assessment of the
‘Sustainable Banking Principles’ of the
Central Bank of Nigeria
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Authors Note:

Introduction
• Sustainable banking integrates social,
environmental along with governance criteria
into traditional ranking.
• Evaluation of the sustainability banking
principles of “The Central Bank of Nigeria” will
also be carried out.

Common Triggers of Sustainability Approaches
in “The Central Bank of Nigeria”
• “The Central Bank of Nigeria” directs complete
implementation of sustainability guidelines
and principles related with developing
financial success (Alao and Sorinola 2015).
• Triggers to implement sustainability principles
include reputational benefits, regularity
requirements and operational advantages

Common Triggers of Sustainability Approaches
in “The Central Bank of Nigeria”
Sustainability Practice Triggers:
• financing opportunities
• employee engagement
• cost reduction
• need for investor fund
• market growth
• product innovation
• competitive pressures
• consumer demand

Triggers for “The Central Bank of Nigeria” in
Sustainable Banking Efforts

Sustainability Principles in “The Central
Bank of Nigeria”
• Principle 1: Decision making regarding business
activities of “The Central Bank of Nigeria” are
integrated with the environmental and social
considerations (Ogbechie 2016)
• Principle 2: Business operations are focused on
minimizing any negative impacts of their business
activities on the environment along with local
communities along with promoting their positive
impacts

Sustainability Principles in “The Central
Bank of Nigeria”
• Principle 3: Following human rights approaches
in which the bank makes increased attempts to
respect human rights
• Principle 4: Women’s economic empowerment
in which the bank successfully promotes
economic empowerment through developing a
gender inclusive workplace culture.

Sustainable Banking Model of “The Central
Bank of Nigeria”

Sustainability Banking Initiatives Growth of
the Central Bank of Nigeria

Approach of “The Central Bank of Nigeria”
in Maintaining Sustainability Principles
• Minimizing the negative effects of its business
operations on the local communities
• Banking operations in compliance with
necessary sustainability social and labor
standards (Cbn.gov.ng. 2019).
• Alignment with bank’s community investment
initiatives within Nigeria’s major goals for
social and economic development.

Conclusion
• “The Central Bank of Nigeria” directs complete
implementation of sustainability guidelines and
principles
• Considers investing within business opportunities,
advanced technologies, low carbon business conducts
and new SMEs.
• Responsible lending principle is also deemed to be
followed by the bank focused on ensuring better
awareness on social well-being, environmental safety
and economic growth.

References
• Alao, A.A. and Sorinola, O.O., 2015. Cashless policy and customers’
satisfaction: A study of commercial banks in Ogun State, Nigeria. Research
Journal of Finance and Accounting, 6(2), pp.37-47.
• Cbn.gov.ng., 2019. [online] Available at:
https://www.cbn.gov.ng/out/2012/ccd/circular-nsbp.pdf [Accessed 2 Jul.
2019].
• Ibrahim, M.G. and Syriac, N.D., 2018. Adoption of CSR for Sustainable
Development in the Nigerian Banking Sector: An Empirical Study. INTI
Journal, 1(19).
• Madugba, J.U. and Ogbonnaya, A.K., 2017. Corporate governance and
earnings management in money deposit banks in Nigeria. Corporate
Governance, 8(8).
• NWOBU, O.A., OWOLABI, A.A. and IYOHA, F.O., 2017. Sustainability
Reporting In Financial Institutions: A Study Of The Nigerian Banking
Sector. Journal of Internet Banking and Commerce, 22(S8), pp.1-15.
• Ogbechie, C., 2016. 10. Corporate governance practices in the Nigerian
banking industry. Handbook on Corporate Governance in Financial
Institutions, p.230.