Author(s): Olabamiji Atanda, Romoke Rafiat Busari, Olugbenro Sunday Kola
This study investigates the impact of corporate sustainability reporting on the market performance of non-financial firms listed on the Nigerian Exchange Group. The primary problem addressed is the ambiguity regarding how various aspects of sustainability reporting—specifically environmental, social, governance, strategic, and stakeholder engagement disclosures—influence firm performance measured by Return on Assets (RETA) and share price (SHPR). The study aims to determine whether these forms of sustainability reporting significantly affect firm performance and to discern the nature of these effects. An ex post facto research design was employed, analyzing secondary data from annual reports of 75 non-financial firms over the period from 2013 to 2022. The study used panel data techniques, specifically GMM regression models, to control for unobserved heterogeneity. The Generalized Method of Moments (GMM) regression was applied to address issues of heteroscedasticity and endogeneity in the models. The results reveal that environmental and social disclosures negatively and significantly affect RETA but positively and significantly impact SHPR. Governance disclosure has a negative and insignificant effect on RETA but a positive and significant effect on SHPR. Stakeholder engagement disclosure shows a positive and insignificant effect on RETA and a negative significant effect on SHPR, while strategic disclosure negatively and insignificantly impacts RETA and significantly decreases SHPR. These findings highlight the complex and multifaceted effects of sustainability reporting on firm performance. This study contributes to the literature by providing nuanced insights into how different dimensions of sustainability disclosures influence market perceptions and financial outcomes for non-financial firms in Nigeria. It emphasizes the importance of balancing transparency with profitability, offering valuable guidance for managers and policymakers in enhancing corporate sustainability and market performance