Effects of Sustainability Reporting on the Market Value of Listed Environmentally Sensitive Companies in Nigeria

Azeez Nurudeen. O, N. Ofoegbu Grace and Dr. Joel Kanyi Tivde
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Azeez Nurudeen. O: Department of Accountancy, University of Nigeria, Nsukka, Enugu Campus
N. Ofoegbu Grace: Department of Accountancy, University of Nigeria, Nsukka, Enugu Campus
Dr. Joel Kanyi Tivde: Department of Accounting, University of Mkar, Mkar, Nigeria

International Journal of Research and Innovation in Social Science, 2025, vol. 9, issue 5, 1143-1157

Abstract: The study investigated the effect of sustainability reporting on market value of environmentally sensitive companies listed in Nigeria. Data from the annual reports of 46 such companies spanning from 2017 to 2022 were analyzed. Tobin’s Q was employed as a proxy for market value, while sustainability reporting was characterized by economic, environmental, social, and aggregate sustainability indicators. The study employed rigorous statistical techniques including Pooled Ordinary Least Square regression (POLS), panel fixed and random effect regression, and feasible generalized least square regressions (FGLS) for data analysis. Results revealed that economic sustainability reporting exhibited a statistically significant positive effect on the market value of listed environmentally sensitive companies in Nigeria. Conversely environmental and aggregate sustainability reporting demonstrated a significant negative association with market value. However, social sustainability reporting showed a positive but statistically insignificant effect on market value. Based on these findings, the study advocates for managerial efforts to enhance economic sustainability reporting by integrating sustainability disclosure into corporate business models and strategies. Additionally, it calls for the formulation of robust policies aimed at effectively managing economic, environmental, and social dimensions to mitigate environmental challenges and augment market value. The study further recommended a comprehensive inclusion of all business transaction costs in financial reporting to enhance market value, fostering positive stakeholder relationships with host communities, suppliers, and employees, as well as the incorporation of the Global Reporting Initiative (GRI) content index in annual reports or sustainability disclosures to shape investor perceptions of future profitability and consequently elevate market value.

Date: 2025
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