EFFECT OF ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (ESG) ISSUES ON SHAREHOLDERS' VALUE AMONG MANUFACTURING COMPANIES IN SUB-SAHARAN AFRICA

Abstract

This study investigates the effect of Environmental, Social, and Governance (ESG) issues on shareholders' value among manufacturing companies in Sub-Saharan Africa. Employing a survey research design, the study collects primary data from 652 management and executive staff across the top 50 manufacturing firms in the region. Using the Taro Yamane formula, a sample size of 248 respondents was determined. Data were gathered via an online structured questionnaire with a five- point Likert scale and analyzed using descriptive statistics and multiple regression models. The regression model, expressed as Shareholders' Value Outcome (SVO) = β0 + β1EI + β2SI + β3GI + μ, revealed that the combined ESG initiatives account for 31.7% of the variance in shareholders' value outcomes. Environmental Initiatives (EI) showed the strongest influence (β = 0.55, p = 0.021), followed by Social Initiatives (SI) (β = 0.42, p = 0.000) and Governance Initiatives (GI) (β = 0.18, p = 0.001). The study highlights that while environmental initiatives have the most substantial effect, all ESG dimensions significantly impact shareholders' value. Recommendations include enhancing environmental strategies, improving social practices, and strengthening governance frameworks to maximize shareholder value and align with evolving expectations.