How Cybersecurity and Data Privacy Drive ESG Strategies in Nigerian Businesses

In today’s increasingly digitized world, data privacy has emerged as a crucial element in the broader context of Environmental, Social, and Governance (ESG) strategies. Historically, data privacy was viewed primarily as a compliance issue, but as businesses globally accelerate their digital transformation, it has become a critical driver of trust, accountability, and sustainability.

Now more than ever, Nigerian businesses, particularly those in financial services, telecommunications, and e-commerce, must navigate the complex relationship between digital growth and responsible data management.?

Data Privacy: A Rising Concern for Nigerian Businesses?

Nigeria’s digital economy is rapidly expanding. According to the National Bureau of Statistics (NBS), the Information and Communication Technology (ICT) sector contributed about 17.47% to Nigeria’s GDP in Q1 2023. As more companies leverage digital platforms to enhance operations and customer experiences, the volume of personal data collected, stored, and shared has soared. However, this rapid digitalization comes with heightened risks of data breaches, cyber-attacks, and misuse of sensitive information. In 2022 alone, the Nigerian Communications Commission (NCC) reported over 3,834,244 cyberattacks targeting Nigerian enterprises, emphasizing the need for robust data protection frameworks.?

Data breaches not only result in financial losses but also erode trust —trust that is paramount for businesses in sectors like banking, telecom, and fintech, which rely heavily on customer confidence. For executives in these industries, protecting personal data is no longer just a regulatory requirement; it is a fundamental pillar of a company’s ESG commitment and a strategic imperative to foster customer loyalty and brand credibility.?

Why Data Privacy Should Be a Core Part of ESG?

In Nigeria, stakeholders—from investors to customers—are increasingly demanding transparency and accountability in how companies manage data. ESG, which measures a company’s impact on the environment, its relationships with stakeholders, and its governance practices, has evolved to include data privacy as an essential factor in assessing corporate responsibility. According to the Global Reporting Initiative (GRI) , privacy-related disclosures are now a key aspect of sustainability reports.?

By integrating data privacy into their ESG frameworks, Nigerian businesses can:?

• Strengthen stakeholder trust: A commitment to responsible data handling reinforces public trust, which is crucial in sectors such as finance and telecom, where customer data is vital to operations.?

• Reduce financial risks: Non-compliance with data protection laws, such as Nigeria’s Data Protection Regulation (NDPR), can lead to hefty fines. In 2021, fines imposed globally for data breaches under GDPR totaled over €1 billion , a clear warning for Nigerian companies to tighten their data protection frameworks.?

• Enhance long-term sustainability: Ensuring data privacy safeguards not only regulatory compliance but also contributes to a company’s long-term resilience and market competitiveness.?

Integrating Data Privacy into ESG Strategies: Practical Steps?

1. Reducing Environmental Impact Through Data Efficiency? Nigerian businesses, particularly those in data-intensive sectors, must adopt energy-efficient IT infrastructure and data storage practices. Data centers, notorious for their high energy consumption, can significantly reduce their carbon footprint by leveraging green technologies such as cloud computing and energy-efficient servers. For example, using cloud-based solutions has been shown to reduce energy consumption by up to 84% compared to traditional data centers.?

1. Promoting Social Responsibility Through Ethical Data Use? With the proliferation of digital services, businesses must ensure ethical handling of personal data. Nigerian consumers are becoming increasingly conscious of how their data is used. Research shows that 80% of Nigerian consumers would cease engaging with a brand after a data breach. Companies must establish transparent data management practices, allowing users to control their data, request deletions, and access privacy settings easily. This proactive approach aligns with the social responsibility component of ESG, fostering stronger community ties and consumer confidence.?

1. Governance: Strengthening Data Protection Frameworks? Strong governance is key to ensuring compliance with data privacy regulations. Nigerian firms need to go beyond simply adhering to the NDPA. Establishing robust internal data governance policies, appointing dedicated Data Protection Officers (DPOs), and conducting regular compliance audits should be a priority. Ensuring board-level oversight on data privacy can mitigate risks and prevent regulatory penalties . A well-governed approach positions firms to be more resilient against cyber threats and data mishandling.?

Strategies for Building Trust through Data Privacy?

1. Empowering Users and Employees? Businesses should enable users to take control of their data. Offering user-friendly privacy controls and promoting data literacy, both internally and externally, will cultivate a culture of trust. Internally, continuous employee training on data privacy best practices is vital for minimizing human error, which accounts for a significant proportion of data breaches.?

1. Strengthening Data Security? Protecting personal data from breaches and unauthorized access is central to maintaining trust. Nigerian businesses, particularly those in sectors like banking and telecom, must adopt advanced data security protocols, such as encryption, multi-factor authentication, and real-time cyber threat monitoring systems. Nigeria experienced 20% of Africa’s total cyber-attacks in 2022, underscoring the need for proactive security measures.?

1. Driving Transparency Through Regular Reporting? Nigerian executives must lead by example by promoting transparent data management policies. Regular ESG reports should include detailed privacy practices, third-party audits, and updates on compliance with regulations such as NDPR and GDPR for global businesses. Transparency is a powerful tool for earning the trust of investors, customers, and regulators alike.?

The Role of Technology in Data Privacy?

Emerging technologies can be a double-edged sword in data privacy. While tools like Artificial Intelligence (AI) can help predict and mitigate risks, they can also introduce new privacy concerns if not managed ethically. Nigerian firms should adopt AI responsibly, ensuring compliance with privacy regulations. Blockchain technology also offers promising solutions, particularly in securing and verifying data transactions, but businesses must ensure that its use aligns with NDPR standards.?

Our Role as a Data Protection Compliance Organisation (DPCO)?

At Stransact, we understand the complexity of data privacy challenges and the need for businesses to maintain the highest standards of compliance while fostering growth. As a Data Protection Compliance Organisation (DPCO) accredited by the National Data Protection Agency (NDPA), we offer a comprehensive suite of services , including:?

• Data Privacy Audits and Assessments: Ensuring compliance with NDPR and global standards.?

• Technology Advisory & Consulting: Helping businesses implement secure, energy-efficient data management systems that align with ESG goals, including cloud infrastructure, AI integration, cloud computing, and more. Click here to find our technology services brochure?

• Data Protection Officer (DPO) Services: Providing expert guidance to develop and manage effective data privacy frameworks.?

• ESG Reporting: Assisting clients in incorporating data privacy into their ESG disclosures to build stakeholder trust and demonstrate commitment to responsible governance.?

In a digital-first world, data privacy is not only a regulatory obligation but also a strategic opportunity to build trust and gain a competitive edge. By integrating privacy into your ESG strategy, your business will not only comply with regulations but also inspire confidence among stakeholders, ensuring long-term success in the Nigerian market and beyond.?