SUSTAINABILITY REPORTING AND FIRM VALUE OF LISTED NON-FINANCIAL FIRMS IN NIGERIA: EVIDENCE FROM NGX COMPANIES (2014-2024)
Keywords:
Environmental disclosure, Firm value, Governance disclosure, Non-financial firms, Nigeria, Sustainability reporting,Abstract
The increasing demand for transparency, accountability, and responsible corporate behavior has heightened the importance of sustainability reporting in assessing firm value, particularly in developing economies such as Nigeria. This study examines the effect of sustainability reporting on the market value of non-financial firms listed on the Nigerian Exchange Group between 2014 and 2024. Specifically, it investigates how environmental, social, economic, and governance disclosures influence firm valuation, while controlling for firm size. A longitudinal research design was adopted, with data obtained from published annual reports. Sustainability reporting was measured using content analysis based on the Global Reporting Initiative (GRI) framework, while firm value was proxied by market-based indicators. Panel regression analysis with a random effects model was employed to estimate the relationships. The findings indicate that social reporting significantly and positively influences firm value, suggesting that disclosures on employee welfare, community engagement, and stakeholder relations enhance investor confidence and market perception. In contrast, economic, environmental, and governance reporting, though positively related, do not exhibit statistically significant effects, highlighting that investors in the Nigerian non-financial sector prioritize social initiatives over other sustainability dimensions. Firm size shows a positive but insignificant relationship with market value, implying that scale alone does not determine investor valuation. These results are consistent with Stakeholder and Legitimacy theories, emphasizing that credible social disclosures strengthen stakeholder trust, corporate legitimacy, and market valuation. The study concludes that firms should prioritize high-quality social reporting, adopt standardized frameworks for economic, environmental, and governance disclosures, and that regulators should enforce uniform reporting standards to enhance transparency and comparability. Investors are encouraged to incorporate ESG disclosures, particularly social metrics, into investment decisions to evaluate long-term value creation.
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