Environmental, Social, and Governance Reporting Evidencing Firm Performance in Emerging Economy

Abosede M. Tiamiyu; Rasheed A. Tiamiyu

doi:10.52589/AJAFR-KGGLCICU

Environmental, Social, and Governance Reporting Evidencing Firm Performance in Emerging Economy | AB Journals

Environmental, Social, and Governance Reporting Evidencing Firm Performance in Emerging Economy

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African Journal of Accounting and Financial Research

Vol. 8Issue 52025pp. 43–61Published 15 December 2025

DOI 10.52589/AJAFR-KGGLCICU

Research Article

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Abstract:

Companies are owned by array of stakeholders with varying interests due to separation of ownership from control Investors are skeptical about reliability of annual report. The continuing demand for transparency led to adoption of Environmental, Social and Governance (ESG) reporting to communicate firms’ sustainability efforts with a view to restoring stakeholders’ confidence. This study examined the influence of ESG reporting on performance of listed manufacturing firms in Nigeria for the period 2013-2022, and employed trade-off theory for theoretical support. The 3 Stage Least Squares (3SLS) results showed that on the aggregate, the coefficient of ESG index on TobinQ is -5.748, with a p-value of 0.000, indicating that ESG disclosure leads to a reduction in firm value. The coefficient of ESG index on ROA is 71.265, with a p-value of 0.000, suggesting improvement in profitability. It was recommended that managers should be decisive on the motivations for engaging in ESG initiatives.

Keywords:ESG reporting Impact Principle for responsible investment Transparency.

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