Does Sustainability Reporting Quality Improve Financial Performance? Evidence from Nigerian Listed Firms
This study examines the effect of sustainability reporting quality (SRQ) on firm performance of listed firms in Nigeria. The study adopts a panel data using a sample of 18 Nigerian listed firms. A weighted disclosure index was constructed using 52 Global Reporting Initiative (GRI)-based indicators across Economic, Environmental, Social, and Governance (EESG) dimensions. The study developed a 5-point sustainability quality scale in 20% intervals to determine the quality of firms’ sustainability reports. Regression analysis was conducted using feasible generalized least squares and robust estimators, with firm-level controls incorporated. The results reveal that SRQ does not exert a uniform influence on firm performance. While there is no significant effect of SRQ on Return on Equity (ROE), SRQ was found to significantly influence Return on Asset (ROA). The study concludes that sustainability reporting quality can enhance certain aspects of firm performance, its influence is not adequate across financial indicators to support a universal performance effect. The findings suggest that sustainability reporting contributes more to internal efficiency than to shareholder returns. This study enhances methodological literature by applying the quadruple bottom line approach to measuring SRQ. The study also developed a quality scale, clearly after calculating the percentage-based scores. This clearly distinguishes between the extent and depth of the sustainability reports that portrays the quality of such reports . Keywords: Sustainability reporting quality, GRI, quadruple-bottom line, financial performance, ROA JEL Classification: M14, M41, G30, Q56
Keywords: Sustainability reporting quality, GRI, quadruple-bottom line, financial performance, sustainability reporting, ROA
Citation: Adeyemo, M.A., Akintoye, I.R., Owolabi, B.A. & Olayinka, I.M. (2026). Does Sustainability Reporting Quality Improve Financial Performance? Evidence from Nigerian Listed Firms. International Journal of Innovative Research in Accounting and Sustainability, 11(2), 41-53.