Effect of Sustainability Disclosure on Financial Performance of Listed Manufacturing Firms in Nigeria.
Publication Date: 14/03/2026
Author(s): Innocent Ameh Oche.
Volume/Issue: Volume 9, Issue 1 (2026)
Page No: 134-145
Journal: African Journal of Accounting and Financial Research (AJAFR)
Abstract:
This study examines the effect of sustainability disclosure on the financial performance of listed manufacturing firms in Nigeria over the period 2014–2023. The study adopts an ex-post facto research design, relying on secondary data extracted from the audited annual reports and sustainability disclosures of manufacturing firms listed on the Nigerian Exchange Group. Sustainability disclosure is disaggregated into social disclosure, economic disclosure, environmental disclosure, and employee health and safety disclosure, while financial performance is measured using Return on Assets (ROA). Content analysis techniques were employed to construct disclosure indices in line with relevant Global Reporting Initiative (GRI) indicators. Descriptive statistics, correlation analysis, panel unit root tests, and panel regression techniques were used to analyze the data. The findings reveal that social disclosure, economic disclosure, and employee health and safety disclosure exert positive and statistically significant effects on ROA, indicating that transparent stakeholder engagement and workforce welfare enhance asset utilization efficiency. Environmental disclosure, although positively related to ROA, does not exhibit a significant short-term impact, suggesting that environmental initiatives may yield financial benefits over a longer horizon. The study concludes that sustainability disclosure contributes meaningfully to financial performance when it strengthens trust, productivity, and reputational capital. It therefore recommends that manufacturing firms adopt integrated sustainability reporting frameworks and align disclosure practices with strategic financial objectives to achieve sustained profitability.
Keywords:
Sustainability Disclosure, Financial Performance, Return on Assets, Manufacturing Firms, ESG Reporting, Nigeria.
