Corporate Sustainability Practices and the Financial Performance of Listed Financial Companies in Nigeria

Abstract

The study examined the effect of sustainability disclosure on the financial performance of listed companies in Nigeria. The study specifically examined the effect of social, environmental, governance and ESG disclosure indexes (proxies of sustainability disclosure) on ROA, ROE, EVA and Tobin’s Q (proxies of financial performance). Ex-post facto and longitudinal research designs were used. The population consists of 49 financial companies listed on the Nigerian Exchange Group database as of May 29, 2022, with a sample size of 36 selected using purposive sampling technique. Data were collected from annual reports, websites of sampled companies, and NGX database based on GRI and ESG sustainability disclosures guidelines. Data were analysed using descriptive and inferential statistics (pooled OLS regression, fixed and random effects model). The study revealed that sustainability disclosure has significant effect on return on asset, economic value added, return on equity and Tobin’s Q of listed companies in Nigeria. The study therefore recommends that all listed financial companies in Nigeria should be mandated to comply with the sustainability reporting guidelines in order to enhance financial performance, environmental, social and governance wellbeing of stakeholders.