Does the Disclosure of ESG Sustainability Matter to Selected Listed Firms Performance in Nigeria?
The aim of the study is to examine the extent to which the disclosure of environmental, social, and governance (ESG) sustainability by listed firms in the Nigerian Stock Exchange (NSE) drive accounting performance of Return on Asset (ROA). Twenty (20) out of population of twenty-four (24) firms were selected for the study using stratified sampling technique. Data sourced from secondary sources includes the annual reports and accounts, and stand-alone sustainability reports of the sampled firms spanning from 2010-2020. A binary coding procedure was utilised for the content analysis of the independent variable (sustainability reporting) proxied by ESG disclosure. While, the dependent variable (firm performance) was measured in terms of ROA. Pooled and panel linear regression econometric analyses was carried out in testing the formulated hypotheses using Stata version 14 statistical software package. The findings reveal that environmental and governance disclosure has no significant effect on ROA. While social disclosure has a positive effect on ROA. Suggesting that an increase in environmental and governance disclosure leads to a decrease in accounting performance in terms of ROA as against an increase in social disclosure which increases accounting performance of ROA. The implication of these findings suggests that the disclosure of ESG sustainability by the sampled firms are not sufficiently in tandem with utilisation of assets in generating more turnover vis-a-via maximizes shareholders returns. It is therefore pertinent to recommend a ‘policy shift’ in the variables of environmental and governance sustainability disclosure. This entails that firms operating in NSE should strike a balance…