Sustainability, ESG Reporting, and Corporate Financial Investment Decisions in Emerging Economies: Panel Evidence From Nigerian Deposit Money Banks
DOI:
https://doi.org/10.51137/wrp.ijarbm.519Keywords:
Environmental Disclosure, Social Disclosure, Governance Disclosure, Investment Decisions, Sustainable Finance, NigeriaAbstract
This study investigates the effect of environmental, social, and governance (ESG) disclosures on investment decisions in Nigeria, using a balanced panel dataset of ten listed deposit money banks from 2012 to 2022. Employing an ex-post facto research design and panel data econometric models, the analysis incorporates Return on Equity (ROE) and Earnings per Share (EPS) as proxies for investment outcomes, while ESG disclosures are modeled through dummy variables. The findings reveal that environmental disclosures significantly enhance firm profitability but reduce shareholder returns in the short term, whereas social disclosures exhibit cost-intensive characteristics that negatively affect earnings performance. Governance disclosures, however, consistently demonstrate a positive and significant impact on investment decisions, highlighting their critical role in reducing information asymmetry and building investor confidence. The study concludes that ESG integration is indispensable for sustainable financial performance in Nigeria, with governance reforms offering the most immediate investment benefits. Policy recommendations include strengthening mandatory ESG reporting frameworks, incentivizing responsible practices, and enhancing firm-level governance structures to align Nigeria’s financial system with global sustainable finance standards.
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Copyright (c) 2025 Taiwo A. Muritala (Author)
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