Citation: Lawrence, M. (2022) ‘sustainability reporting and financial performance of companies listed in the Nigeria Stock Exchange’, European Journal of Accounting, Auditing and Finance Research, Vol.10, No. 5, pp.25-73
Sustainability reporting is currently a contemporary issue in accounting studies. This study examines the impact of sustainability reporting compliance on the financial performance of listed firms in Nigeria. Secondary data was collected from annual reports of a sample of fifty seven companies listed on the Nigerian Stock Exchange. Simple disclosure index was used to score sustainability reporting Compliance using Economic (ECM), Environmental (EVM) Social (SOC) and Governance (GOV) disclosures in the annual reports of the sampled firms based on Nigeria Stock Exchange (NSE) Sustainability Reporting Guideline. The firms’ financial performance was evaluated based on Net Profit Margin (NPM) and Return on Capital Employed (ROCE). Using least square panel data analysis, the results show that listed companies in Nigeria have significantly complied with the sustainability disclosure guideline. The aggregate average sustainability Reporting Compliance (SRC) by all the firms examined was 75%. It was also found that there is a significant association between sustainability Reporting Compliance and Net Profit Margin (NPM) as well as Return on Capital Employed (ROCE). It is recommended that companies, both local and international should adopt sustainability in their day-to-day policies to be legitimate in their daily activities on the planet and also enjoy better financial performance. There should also be legislative backing for sustainability reporting compliance to enable companies comply and there is need for uniformity in sustainability framework since the subject is an evolving one.
Keywords: Financial Performance, sustainability guidelines, sustainability reporting
