Sustainability Reporting and Financial Performance: Panel Analysis of Return on Capital Employed in Nigeria’s Consumer Goods Sector
This study investigates the impact of sustainability reporting on Return on Capital Employed (ROCE), a capital efficiency indicator that has received limited attention in sustainability accounting literature, using evidence from listed consumer goods firms in Nigeria. The analysis spans the period 2007 2022 and adopts an ex post facto research design, relying on secondary data obtained from the Nigerian Exchange Group (NGX) Factbook. To ensure methodological rigor, the study applies static and dynamic panel models estimated through Panel Estimated Generalized Least Squares (EGLS), enabling effective control for firm specific heterogeneity and dynamic adjustments within an underexplored emerging African market context. Empirical results indicate that social disclosure has a negative and statistically significant effect on ROCE, reflecting potential short term cost burdens and operational inefficiencies associated with extensive social reporting. Conversely, environmental, economic, and corporate governance disclosures exert positive and significant effects on capital efficiency, underscoring their role in improving firms’ effective utilization of invested capital. Additionally, firm age is positively related to ROCE, while firm size and leverage are associated with reduced capital efficiency. From a policy and managerial standpoint, the findings emphasize the need for regulators and corporate decision makers to encourage strategic environmental, economic, and governance disclosures, while ensuring that social disclosure practices are aligned with performance oriented and merit based frameworks to prevent adverse effects on capital efficiency. Keywords: Return on capital employed, sustainability reporting, financial reporting quality, compliance JEL Classification: M14, G32, C23, Q56, M41
Keywords: Return on capital employed, Sustainability reporting, Financial reporting quality, Compliance
Citation: Odutola, O.A., Oguntuase, A.T. & Olabisi, J. (2026). Sustainability Reporting and Financial Performance: Panel Analysis of Return on Capital Employed in Nigeria’s Consumer Goods Sector. International Journal of Innovative Research in Accounting and Sustainability, 11(1), 23-34.