European Journal of Accounting, Finance and Investment

Sustainability Reporting And Firms Economic Performance In Nigeria

Peter-Mario Efesiri EFENYUMI

Department of Accounting, Michael and Cecilia Ibru University, Agbarha-Otor, Delta State, Nigeria

Jeremiah Ununotovo OHIS

Department of Accounting,University of Port Harcourt, Port Harcourt, Rivers State, Nigeria

Alutosa Uwomano IKELEGBE

Department of Accounting, Western Delta University, Oghara, Delta State, Nigeria

Sylvester Eseoghene OKAH

Department of Accounting, Western Delta University, Oghara, Delta State, Nigeria

Keywords: Sustainability, Sustainability reporting, Environmental, Social, and Governance (ESG), Economic Performance, Return on Assets, Return on Equity, , Net Profit Margin, Nigeria

---

Abstract

Sustainability reporting has become a pivotal tool for firms in industries and firms have faced significant scrutiny due to their environmental impact, necessitating the integration of environmental, social and governance considerations into financial decision-making. The goal of this study is to examine the influence of sustainability reporting on the economic performance of firms in Nigeria. Using the ex-post facto research design, data were extracted form 48 selected firms for 10 years and were analysed. The findings showed that sustainability reporting framework adoption has a slight negative and insignificant influence on return on assets, but insignificant positive influence on return on equity and net profit margin while sustainability reporting exercised statistically insignificant negative influence on return on assets, return on equity and net profit margin and the study concluded that sustainability reporting has not been significantly integrated into the annual financial reporting framework of most of the firms and that sustainability reporting does not significantly influence, return on assets (ROA), return on equity (ROE) and  net profit margin (NPM) performance of firms in Nigeria. Upon this, study therefore recommends that despite the mixed regression results, the positive correlations suggest that sustainability reporting may still offer reputational and long-term financial benefits and that firms should improve sustainability reporting to meet stakeholders expectations and potentially gain market advantages and that clearer guidelines on sustainability reporting and disclosure could improve comparability and reliability thus helping investors and analysts better assess sustainability performances.

---

References

Adebayo, K. K., & Adegbie, F. F. (2023). Analysis of environmental accounting and reporting practices of listed banking companies in Nigeria. Journal of Finance and Accounting, 11(4), 137-148. https://doi.org/10.11648/j.jfa.20231104.18

Afiyah, H., Jannah, B.S., & Junjunan, M.I. (2023). The impact of green accounting and environmental performance on firm value with profitability as an intervening variable. Journal of Accounting and Business Economics, 12(2), 21-32. https://doi.org/https://doi.org/10.33795/jaeb.v12i2.5122

Ahmad, M. (2022). Environmental accounting and sustainable firm performance. International Journal of Accounting and Finance Research, 10(1), 45-62. https://doi.org/10.5281/zenodo.6789104

Ahmed, S., & Anifowose, M. (2023). Corporate environment disclosures and profitability: Evidence from Nigeria. African Journal of Accounting, Auditing and Finance, 14(1), 65-82. https://doi.org/10.1504/AJAAF.2023.10049821

Akabom, I.T. (2022). Environmental regulations and accounting practices in Nigeria. Calabar: Greencourt Publishers.

Akbas, H.E. (2024). Environment cost disclosure and firm performance: A cross-industry analysis. Journal of Environment Economics and Policy, 13(2), 98-114. https://doi.org/10.1080/21606544.2024.2014567

Akinleye, G. T., & Owoniya, B. O. (2024). Sustainability reporting and performance of selected quoted firms in Nigeria. Asian Journal of Economics, Business and Accounting, 24(6), 53-67. https://doi.org/10.9734/ajeba/2024/v24i61342

Akinlo, A.E., & Iredale, D. (2024). Institutional barriers to environmental reporting in developing countries: Evidence from Nigeria. Journal of Cleaner Production, 383,135401. https://doi.org/10.10.1016/j.jclepro.2024.135401

Amahalu, N.N., Ezechukwu, B.O., & Obi, J.C. (2023). Environmental cost accounting and shareholder value in Nigerian quoted firms. Journal of Business & Environmental Studies, 5(1), 25-39.

Amahalu, N.N., Okoye, P.V.C., Obi, J.C. (2023). Environmental accounting and sustainable reporting in SMEs. Asian Journal of Accounting Research. https://doi.org/10.1108/AJAR-02-2022-0031

Bai, X., Pingli, Z.,& Zhuang, Z. (2024). Environmental disclosure, regulation, and firm value: Evidence from Africa. Environmental Economies and Policies Studies, 26(2), 251-273. https://doi.org/10.1007/s10018-024-00312-1

Bassey, E.B., Sunday, A O., & Okon, E.E. (2023). Regulatory compliance and adoption of environmental accounting practices in Nigeria. Journal African business, 24(1), 62-81. https://doi.org/10.1080/15228916.2023.2164591

Beredugo, S.B., & Mefor, O.P. (2022). Environmental accounting and disclosure practices among oil and gas firms in Nigeria. Nigerian Journal of Accounting and Finance, 8(1), 87-101.

Bernardi, C., & Stark, A W. (2022). Environmental accounting in developing economies: An analysis of Nigerian firms. Accounting, Auditing, and Accountability Journals, 35(4), 865-890. https://doi.org/10.1108 /AAAJ-05-2021-5207

Brolund, M., & Lundmark, M. (2023). Institutional challenges in African environmental governance. Environment, Development, and Sustainability, 25(2), 911-930. https://doi.org/10.1007/s10668-022-02111-3

Campbell, D., & Slack, R. (2021). Longitudinal assessment of environmental disclosures in Nigeria. Journal of Business Ethics, 170(2), 387-403.

Chang, M. (2023). The impact of environmental accounting on profitability: A meta-analytic review. Journal of Cleaner Production, 385, 134941. https://doi.org/10.1016/j.jclepro.2023.134941

Christensen, D.M., Serafeim, G., & Sikochi, A. (2022). Why is corporate virtue in the eye of the beholder? The case of ESG ratings. Accounting Review, 97(1), 147-175.

Efenyumi, P.E., Nwoye, U.J., & Okoye, E.I. (2022). Impact of nomination and governance committee attributes on earnings management of listed firms on the Nigerian Exchange Group. Hmlyan Jr Eco Bus Mgn, 3(5), 26-34.

Efenyumi, P.E., Okoye, E.I., & Nwoye, U.J. (2022). Empirical evaluation of effects of intellectual capital efficiency on firm’s value in some selected listed firms on Nigerian exchange group. International Journal of Research in Social Science and Humanities, 3(6), 16-37. https://doi.org/10.47505/IJRSS.2022.V3.6.3.

Huibrecht, M.V. (2022). The barriers and drivers of environmental management accounting practices' adoption in developed and developing countries for sustainable development. Sustainable Development, 30(5), 1222-1234. https://doi.org/10.1002/sd.2312

Ibrahim, S., Danbatta, S.A., & Dandago, K.I. (2025). Environmental accounting and sustainability reporting in Nigeria. International Journal of Research and Innovation in Social Science, 9(5), 921-929. https://dx.doi.org/10.47772/IJRISS.2025.90500076

Ifurueze, M.S.K., Lyndon, M.E., & Bingilar, P.F. (2023). Environmental custom management and profitability of Nigerian manufacturing companies. Nigerian Journal of Financial Research, 14(3), 76-90.

Ijeoma, N.B. (2023). Environmental accounting and Nigerian corporate governance: An empirical perspective. African Journal of Economies and Sustainable Development, 8(2), 144-158.

Ismail, W K., & Ibrahim, S. (2022). Determinants of environmental accounting adoption in Nigeria: Regulatory perspective. Sage Open, 12(1), 1-14. https://doi.org/10.1177/21582440221085216

Jerry, A., Teru, A.J., & Musa, D.I. (2014). Environmental accounting and Nigerian practice. International Journal of Economics and Finance, 6(1), 22-31.

Jide , I. (2025). Effect of environmental accounting on firm value with profitability as an intervening variable. Journal of Public Administration, Public Affairs, and Management, 23(2), 65–92. https://doi.org/10.14456/pa.2025.13

Marvin, R., Obi, P., & Areola, T. (2023). Long-term benefits of sustainability disclosures in Nigerian firms. Journal of Corporate Social Responsibility, 12(4), 215-234.

McNally, G., Effiong, U., & Oboh, C. (2023). COVID-19 and the future of corporate sustainability in Africa. Global Business Review, 24(1), 101-119.

Medley, R. (2023). Cementing sustainability: Environmental accounting in Nigeria’s cement industry. Journal of Accounting and Sustainability, 11(3), 195-211.

Neu, D., Everett, J., & Rahaman, A.S. (2022). Are companies and the production of sustainability. Critical Perspectives on Accounting, 43, 50-64.

Nyahuna, T., Doorasamy, M., & Baldavoo, K. (2023). Barriers to implementation of environmental management accounting in South African Small and Medium Enterprises for Sustainable Performance. Indonesian Journal of Social and Environmental Issues, 4(3), 258-266. https://doi.org/10. 47540/ijsei.v4i3.995

Nzama, S., Olarewaju, O. M., & Arise, O.A. (2023). Evaluating the influence of barriers to environmental sustainability on environmental management accounting in the food and beverage manufacturing firms in Durban, South Africa. Journal of Accounting and Management, 13(1), 79-88.

Ojo, O.O., & Balogun, S.B. (2019). Environmental accounting disclosure and firms profitability in Nigeria. Ilaro Journal of Environmental Research & Development, 3(1), 80-93.

Patima, Syarif, M.H., & Sari, R. (2024). Environmental accounting practices and firm profitability: a granger causality analysis of Nigerian manufacturing firms. International Journal of Economics, Business and Management Research, 8(9), 230-244. https://doi.org/10.51505/IJEBMR.2024.8914

Saputri, S.A., Maharani, B., & Prasetya, W.A. (2023). The influence of environmental performance, environmental disclosure, and environmental costs on firm value. Champion: Accounting Research Journal, 13(1), 94–111. https://ejournal.unmas.ac.id/index.php/juara/article/view/6183

Upaa, J., & Iorlaha, M. (2022). Integration of environmental, social, and governance (ESG) in accounting frameworks for sustainable performance: A theoretical review. Kashere Journal of Accounting and Finance, 2(1), 77-101.