Examining the Research Gap in Green Finance and Sustainable Investment in Nigeria

Green finance instruments including green bonds, sustainability-linked loans, and carbon trading represent a rapidly growing global market that Nigeria's financial system has barely engaged, and mapping this research gap identifies priorities for Nigeria's sustainable finance development. This study examined the research gap in green finance and sustainable investment in Nigeria through systematic review and original market analysis. A systematic scoping review of 10 databases identified only 7 publications from 2019 to 2024 specifically examining green finance in Nigeria, compared to 340 publications in comparable emerging economy contexts. Original market analysis assessed existing green bond issuances (Debt Management Office green bond series), sustainability-linked loan issuances, and bank environmental risk integration practices. Analysis confirmed that Nigeria's green bond market has issued USD 72 million across two sovereign issuances but corporate green bonds remain absent. Only 3 of 24 commercial banks had formal environmental risk management policies. The carbon market framework under the Finance Act 2021 had not been operationalised by 2023. Five research gaps were identified: the absence of green premium (greenium) analysis for Nigerian issuances, limited study of green finance barriers in the banking sector, understudied climate risk integration in financial institutions, absent retail green investment product research, and no study of green finance and SME access. Recommendations include SEC establishing a green finance certification framework, CBN issuing green finance guidelines for banks, and NSE launching a dedicated green investment segment.

Keywords: green finance, sustainable investment, Nigeria, green bonds, environmental finance