Environmental, Social and Governance Disclosures and Value of Firms Listed on the Premium Board of Nigeria Exchange

Abstract

Stakeholders now expect the companies to be further helpful by presenting evident and significant information that are both monetary and non-monetary in nature. The study exertion is baseline research, intended to acquire realistic proof on the impact of Environmental, Social, and Governance (ESG) disclosures on the value of firms registered on the premium board of Nigeria. An ex-post facto research design was used to gather secondary data from the sustainability and annual reports of 8 companies over 7 years (2017–2023), yielding 56 observations. Regression model is used to analyze the hypotheses and descriptive analysis was utilized in assessing the data. The results showed negative but insignificant relationship between firm value and ESG disclosures. This result implies that ESG disclosures have not yet produced substantial advantages for investors in Nigeria. However, businesses may use sustainability reporting to improve their reputation or comply with regulations, but this hasn't yet produced the signaling effect. This outcome underscores the need for companies to enhance the quality, consistency, and materiality of their ESG reports. Although the study's conclusions might shed light on the Nigerian situation, it's possible that they won't apply directly to further countries or international markets due to the chosen research approach. The study offers a quantitative basis for ESG reporting in developing nations and emphasizes the necessity for businesses to improve the caliber and strategic coherence of ESG disclosures to possibly affect firm value down the road.