Abstract Book of the 14th International Conference on Opportunities and Challenges in Management, Economics and Accounting
Year: 2026
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Sustainability Reporting and Financial Performance: Empirical Evidence from Nigerian Listed Industrial Goods Companies
Akindele Adeniyi, Joel Adeniyi Okewale, Taophic Olarewaju Bakare, Jide Ibikunle, Aminat Arike Ariyo-Edu
ABSTRACT:
Corporate enterprises significantly influence their local communities and external environments. Sustainability reporting has emerged as a key tool for communicating corporate commitment to environmental compliance, driven by rising investor demand for environmental disclosures. However, measuring the costs and value of environmental externalities such as damage, depletion, and degradation remains a critical challenge. This study examines the effect of sustainability reporting on the financial performance of listed industrial goods companies in Nigeria. Secondary data were obtained from annual reports covering 2012–2025, with a sample of 17 firms listed on the Nigerian Exchange Group (NGX) selected through purposive sampling. An ex-post facto design was employed, using the Generalized Method of Moments (GMM) dynamic estimator. Findings show that Global Compact (GC), Global Reporting Initiative (GRI), and Corporate Social Responsibility Ranking (RANK) have negative and statistically significant effects on return on equity (ROE), with coefficients of −1.3760 (p = 0.009), −0.1132 (p = 0.003), and −0.1500 (p = 0.006), respectively. In contrast, Sustainable Growth Rate (RATE) has a positive and significant effect (coefficient = 0.0270; p = 0.004). The Dow Jones Sustainability Index (DJSI) shows a positive but insignificant effect (coefficient = 0.0082; p = 0.157), while Corporate Social Responsibility Disclosure (CSRD) has a negative and insignificant effect (coefficient = −0.0087; p = 0.497). The study concludes that while sustainability initiatives can enhance growth and legitimacy, their cost and compliance demands may constrain profitability unless effectively managed. Firms should strengthen environmental responsibility and expand sustainability engagement to improve financial performance.
Keywords: sustainability reporting; external environment; local community; legitimacy theory