Conceptualization of sustainable finance: A case study of publicly quoted banks in an emerging market

Abstract

This study explores how publicly listed banks in Nigeria, a leading African emerging market, conceptualize sustainable finance—an agenda that has shifted from a peripheral corporate social responsibility (CSR) activity to a core strategic and risk-management priority. Adopting an interpretivist qualitative multi-case design, the study draws on semi-structured interviews with 12 senior executives (managing directors, chief financial officers [CFOs], chief risk officers [CROs], and heads of sustainability) from publicly quoted commercial banks in Nigeria. Inductive thematic analysis identified three dominant conceptualizations: compliance-centric, risk-centric, and strategy-embedded. Looking through the lens of stakeholder theory, each archetype reflects the relative influence of different stakeholder groups and is operationalized through observable credit-risk practices, including environmental, social, and governance (ESG) checklists, exclusion lists, conditional approvals with remediation timelines, enhanced due diligence, and post-disbursement monitoring. Banks that engaged with global frameworks—notably the Equator Principles, the United Nations Principles for Responsible Banking (UN PRB), and emerging International Financial Reporting Standards (IFRS) S1–S2 disclosure standards—demonstrated deeper ESG integration. The study argues that conceptual clarity, together with alignment between global standards and local guidelines, predicts operational maturity. A four-building-blocks playbook—governance and incentives, policy and processes, data and tools, and disclosure and assurance—is proposed as practical guidance for boards, risk teams, and supervisors seeking to strengthen sustainable-finance implementation in emerging markets.