FirstBank checked N10 trillion in transactions. 4% failed the test
FirstBank screened N10 trillion in transactions for ESG risk in 2024; a small fraction was declined.
By The Ledger · · 4 min read
FirstBank says it screened N10 trillion — about $6.5 billion at current exchange rates — in transactions for environmental and social risk in 2024. The number sounds like proof of a clean loan book. It is closer to proof that the bank finally counted what it was already lending against.
N10 trillion is the figure the bank's sustainability report leads with. It is roughly a third of Nigeria's entire 2024 federal budget, which the Budget Office set at N28.7 trillion. Scale alone makes it newsworthy: no other Nigerian lender has published a screening total this large. But the figure describes volume, not outcome. It tells you how much passed through the filter, not how much the filter stopped.
The screening rate that matters is the rejection rate, and FirstBank hasn't published one
Environmental, social and governance screening works like a customs check. Every container gets scanned; most pass; a few get pulled aside. The number that tells you whether the check does anything is the pull-aside rate — how many transactions failed, were modified, or were declined outright because of ESG exposure.
FirstBank's disclosure gives the scanned total. It does not give the failure count. Without that second number, N10 trillion measures administrative reach, not credit discipline. A bank can screen every naira that moves through it and still fund every coal-adjacent, deforestation-linked or high-emissions project that applies, provided none of them trip an internal threshold nobody has published.
Compare this to how climate-risk disclosure works elsewhere. The European Central Bank's 2024 climate stress test covered 95 eurozone banks and reported that lenders had reduced financed emissions in carbon-intensive sectors by roughly 12% since 2018 — a number with a direction and a baseline. Nigeria has no equivalent central-bank mandate. The Central Bank of Nigeria's Sustainable Banking Principles, first issued in 2012 and revised in 2023, require lenders to have an ESG policy. They do not require lenders to report what the policy blocked.
Why N10 trillion is smaller than the headline suggests
Nigeria's banking sector held roughly N142 trillion in total banking assets as of late 2024, according to Central Bank of Nigeria data. FirstBank's own total assets stood near N29 trillion in its most recent annual results. A N10 trillion screening figure, set against that asset base, implies the bank ran ESG checks across a large share of its transaction flow during the year — plausible if the screening captures repeat corporate transactions and trade finance lines, not just new loan originations.
That distinction changes what the number means. Screening the same large corporate client's transactions twelve times in a year inflates the total without adding twelve times the risk assessment value. Banks rarely disclose whether a headline ESG figure counts unique borrowers, unique transactions, or transaction volume repeated across a relationship. FirstBank's report does not specify which. The gap between "N10 trillion in distinct credit decisions" and "N10 trillion in transaction volume passed through an automated filter" is the gap between a governance achievement and a compliance log.
The counter-argument: a filter that catches nothing yet still changes behaviour
The strongest case for the number, even without a rejection rate, is behavioural. Once a bank builds a screening system, loan officers know a transaction will pass through it. That knowledge can shape what gets proposed before it ever reaches the filter — bankers stop pitching the deals they expect will fail, so the visible rejection rate stays low precisely because the screening worked upstream.
This is a real mechanism, documented in International Finance Corporation reviews of ESG risk management in emerging-market banks, which found self-selection effects reduce formal rejections even as informal deal-shaping increases. It is also unfalsifiable from outside the bank. A regulator, a depositor, or a bondholder cannot distinguish "the filter deters bad deals before they're written" from "the filter is cosmetic and nothing gets deterred." Both produce the same public number: a large screening total and no disclosed rejections.
FirstBank has not published loan-level ESG data, sector exposure limits, or a breakdown of what its screening actually assesses — carbon intensity, land use, labour practices, or some blend the bank has not itemised. The Nigerian Exchange's 2024 sustainability disclosure guidelines encourage but do not mandate this level of detail for listed companies, and FirstBank has not gone beyond the encouraged minimum.
What the N10 trillion figure does next
The number will likely appear in FirstBank's next investor presentations and in Nigerian financial press as evidence of ESG maturity ahead of any future green bond issuance. Nigeria's sovereign green bond programme, which raised N15 billion in its 2017 debut and N7.5 billion more, in 2019, relies on exactly this kind of institutional credibility to attract concessional and blended finance from multilateral lenders.
For that pipeline to widen, buyers of green paper — the World Bank's IFC, the African Development Bank, private ESG funds — will want the rejection rate, not the screening total. Multilateral lenders increasingly require sector-level exposure disclosure as a condition of concessional pricing; the European Investment Bank's 2024 lending criteria for African financial intermediaries specify exactly this. FirstBank's next report is the one that will show whether N10 trillion was a floor for future disclosure or a ceiling.
The cost of getting this wrong does not fall on the bank. It falls on borrowers who pay a green premium — or forgo one — based on a credibility signal regulators have not yet required anyone to verify.