SUSTAINABILITY REPORTING AND MARKET VALUE OF LISTED NON-FINANCIAL FIRMS IN NIGERIA

Abstract

This study investigates the nexus between Environmental, Social, and Governance (ESG) reporting and capital market performance in Nigeria, inspired by the growing faith-driven demand for corporate accountability and transparency. Despite the global surge in ESG compliance, the Nigerian context remains underexplored, particularly concerning its effects on stock market metrics. The study's main objective is to empirically examine how ESG disclosures influence the performance of listed companies on the Nigerian Exchange Group. Anchored on stakeholder theory, the study employed an ex-post facto research design. The population comprised all 59 non-financial firms listed on the Nigerian Exchange between 2014 and 2023. A sample of 43 firms was purposively selected based on the availability of ESG disclosures. Secondary data were collected from annual reports, and ESG scores were computed using a weighted index approach. Market Capitalization was proxied by Tobin's Q and stock return. Data were analyzed using panel regression models. The findings reveal a positive and significant relationship between ESG reporting and market value, with governance indicators exerting the most substantial influence. the study concludes that while environmental disclosure significantly enhances firm value in Nigeria's capital markets, the effects of social and governance disclosures are more nuanced. The study recommends that regulators strengthen ESG disclosure guidelines and that firms adopt integrated sustainability frameworks. Faith-based investment circles are also urged to promote ethical investing, aligning profit motives with societal values.