Climate-Related Performance Disclosure of IFRS S2 Early Adopters in Nigeria

The study examines the quality of performance disclosures on climate related risks and opportunities of early adopters of International Financial Reporting Standards (IFRS) S2 Climate-Related Disclosures in Nigeria and the motivations for the early adoption of the standard. Data were collected from their 2023 sustainability reports and seven semi-structured interviews involving their sustainability officers, accountants and consultants. Based on the metrics and targets specified in IFRS S2, a non-weighted disclosure index was constructed and used to score the sustainability reports of the early adopters. The findings provide evidence of low-quality performance disclosures on climate-related risks and opportunities owing to the non-disclosure of certain items required by IFRS S2. Thematic analysis used in the analysis of the interview data revealed that the motivation to early adopt the standard is dominated by a desire to signal superior performance about climate-related disclosures as opposed to legitimation. Another dominant motivation is signalling this information to investors to attract capital. The study calls for support from both the standard setters and regulators so the IFRS’s adoption in Nigeria succeeds.