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Volume 13 Issue 2, April – June 2025 

ISSN: 2836-9416 

Impact Factor: 6.41 

Journal Homepage: https://americaserial.com/Journals/index.php/ARJEFM 

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43 | P a g e  

ENVIRONMENTAL, SOCIAL AND GOVERNANCE DISCLOSURE 

ON CORPORATE PERFORMANCE: A STUDY OF AGRICULTURAL 

FIRMS AND HEALTH CARE FIRMS IN NIGERIA 
 

Nwachukwu Raphael (PhD) and Azodo Chinyere 

Department of Accountancy, Tansian University, Umunya, Nigeria 

E-mail: chikwute@yahoo.com 

DOI:https://doi.org/10.5281/zenodo.15639229 

 

Abstract: This study determined the environmental, social and governance disclosure on corporate 

performance of two selected firms in Nigeria (agricultural firms and health care firms). The study 

employed environmental disclosure, Social disclosure and corporate governance disclosure as the 

independent variables and return on assets as the dependent variable. Ex Post Facto research 

design. Data were analyzed with descriptive statistics, and the hypotheses were tested inferential 

statistics. Multiple regressions were employed to test the hypotheses. The study regression result of 

the model showed that the environmental disclosure had a positive coefficient of 0.0032 and a p-

value of 0.040 which was significant at 5% level. The hypothesis result showed that the variable of 

social practice disclosure had a positive coefficient of 0.000390 and a p-value of 0.087 which was 

significant at 5% level.  Another finding showed that the regression result of model showed that the 

variable of governance practices disclosure had a negative coefficient of -0.000558 and a p-value of 

0.355 which was significant at 5% level. Based on the outcome of the study, the study suggested 

among others that since environmental, sustainability disclosures positively affects financial 

performance, the companies need to develop and publicize detailed environmental policies and 

practices. This includes reporting on emissions reductions, waste management, and resource 

conservation efforts.  

Keywords: Environmental disclosure, Social disclosure, Governance disclosure and Return on 

assets. 

 

Introduction 

Environmental, Social and Governance (ESG) credentials have become a global trend nowadays and 

are increasingly important for companies due to spreading awareness of their responsibility for 

sustainable growth and their multi-dimensional impact on society (Kaakeh & Gokmenoglu, 2022). 

Sustainable development in all fields of activity is ever more demanded to become a compulsory 

requirement at the global level (Chien, 2023) and companies are increasingly using sustainability 

strategies and this has led to notable shifts in business models and management practices (Chang & 

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American Research Journal of Economics, Finance and Management 

Volume 13 Issue 2, April – June 2025 

ISSN: 2836-9416 

Impact Factor: 6.41 

Journal Homepage: https://americaserial.com/Journals/index.php/ARJEFM 

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Lee, 2022). Firms are implementing optimal strategies focused on maximizing stakeholder value 

while also achieving the company’s financial goals (Al Amosh, Khatib & Ananzeh 2022). The practical 

implementation of this new paradigm is reflected in the increasing efforts companies are making to 

properly assess their commitment to sustainability and global long-term development goals (Chang & 

Lee, 2022).  

ESG indicators have become relevant for both companies and investment fund managers or 

shareholders (Orsato et al., 2015). Investors are increasingly considering environmental, social, and 

governance issues when selecting their portfolios. This information allows them to steer towards 

investments that can be socially and environmentally beneficial (Orsato et al., 2015). It is 

recommended for companies aiming to implement integrated reporting (IR) using the International 

Integrated Reporting Council (IIRC) Framework to use company-specific determinants to encourage 

IR adoption (Tiron-Tudor, Hurghis, & Topor, 2022). The criteria used by financial and management 

professionals to differentiate between various potential investments include environmental, social 

and corporate governance indicators. All these are arguments for firms to consider non-monetary 

objectives in their activities (Noja, et al, 2024).  Environmental, Social and Governance (ESG) 

information is getting gradually more included into corporate communication (Arvidsson, 2010; 

Ihlen, 2008). ESG can also be known as ‘extra financial’ information that help investors make 

investment decision by better assessments of risks and opportunities (Bassen & Kovacs, 2008).  

Numerous studies have examined the link between ESG practices and corporate economic 

performance, but most of them focus on a single ESG dimension (Kaakeh & Gokmenoglu, 2022; Mu, 

Wang & Mohiuddin, 2022; Wu & Li, 2023). The integrated analysis of all three dimensions is 

considered quite difficult to address, as ESG topics are very broad and comprehensive. In this 

complex framework, the current research aims to fill in the gap and address this challenge by analyz-

ing the interplay between the ESG dimensions and companies’ economic performance in a new 

comprehensive approach. We address a general objective to assess whether ESG policy performance 

leads to increased economic performance and to analyze the three pillars of sustainability, the so-

called “triple bottom line of sustainability” (Kouaib et al., 2020), namely that environmental 

performance (planet), social performance (people) and the performance of corporate governance 

policies lead to an increase in the economic performance of companies (profit). Majority of these prior 

studies were carried out in foreign countries like China, Malaysia, Korea and others. There is a limited 

study of this nature in Nigeria up to 2023 financial data using agricultural firms and health care firms, 

thereby create a geographical gap. This study ascertain the effect of environmental, social and 

governance (ESG) practices on corporate performance of manufacturing firms in Nigeria. The specific 

objectives to: 

1. Ascertain the effect of Environmental practices on financial performance of firms listed on Nigeria. 

2. Ascertain the effect of Social practices on financial performance of firms listed on Nigeria. 

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American Research Journal of Economics, Finance and Management 

Volume 13 Issue 2, April – June 2025 

ISSN: 2836-9416 

Impact Factor: 6.41 

Journal Homepage: https://americaserial.com/Journals/index.php/ARJEFM 

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3. Evaluate the effect of corporate governance practices on financial performance of firms listed on 

Nigeria. 

Conceptual Review 

Environmental, Social and Governance (ESG) 

In recent years, there has been expanding utilization of ESG information by stakeholders, particularly 

investor. Initially, there is limited information on non-financial data such as ESG disclosures. For the 

most part, they are referring to traditional extraction data for yearly report and website of the 

company. Nowadays companies are moving to data stream based to remain competitive as pressures 

from stakeholder on environmental issues such as climate change, pollution and waste are growing 

significantly. The role of ESG information much transformed changed the business adequately and 

effectively (Indarawati, Ruhanita & Nor, 2016). Firms are aware that ESG disclosure is critical to 

portray their good reputation and image in meeting the challenge of green issues to their 

stakeholders. Trends on disclosing ESG practices in the global data stream are colossally expanded 

throughout the years as an exertion of the companies to remain sustainable.  

Furthermore, companies with strong ESG performance have a keen knowledge of the long-term 

strategic issues in their industries and managers at these companies can manage by long-term goals. 

Such companies make the necessary long-term decisions to ensure the success of their business over 

longer time periods to remain sustainable (Greenwald, 2010). 

Environmental Practices 

The support of the advance technology and product innovation could enhance the environmental 

performance as it reveals a company's capacity to lessen the environmental costs and burdens for its 

customers and thereby creating new market opportunities through new environmental technologies 

and processes or eco-designed, dematerialized products with extended durability (Thomson Reuters, 

2015). Melnyk, Sroufe and Calantone (2003) reported that stronger environmental performance can 

improve the value of the firm and attract new stakeholders. A good environmental practice on 

operational activities can generate reasonable costs saving as well as keeping away from the business 

effect of the contamination issue (IFAC, 2005). On the other hand, Elsayed and Paton (2005) used 

three alternative measures of firm performance or economic performance, i.e., Tobin’s q, return on 

assets and return on sales. Their study provides evidence that environmental performance has less 

impact on financial performance. 

In the same paradigm Ambec et al. (2013) suggested that it can be considered that pollution is 

equated to a waste of resources, a reduction of which can lead to an improvement in the resources use 

efficiency. In other words, we can state that innovation is a catalyst for the sustainable activities of 

business organizations (Noja, et al. 2024). In the same direction, Chen and Ma (2021) stated that the 

impact of green investment in improving firms’ long-term performance can be strengthened by 

environmental performance. Thus conclude that it takes a sufficiently long time for compliance with 

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Volume 13 Issue 2, April – June 2025 

ISSN: 2836-9416 

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regulations from an environmental perspective and social initiatives addressing this dimension to 

materialize in financial performance 

Social Practices  

While Wood, (1991) documented that corporate social practice is a business organization's 

conformation of ideologies of social responsibility, processes of social responsiveness and policies, 

programs and tangible outcomes as they relate to the firm's social relationships.  The perception of 

corporate social responsibility seems to be as old as the business itself (Ferramosca & Verona, 2020), 

In that way, CSR can be viewed as a part of the business strategy that can improve financial and 

market performance (Berber et al., 2022).  

The links between corporate social performance and financial performance are still far from being 

clarified in literature and contradictory evidence expressing the relationship between them is noted, 

both in intensity and sign (Lahouel et al., 2021). Results from empirical work indicate an ambiguous 

relationship between them (Ho et al., 2021; Jacobs et al., 2016). One fundamental reason for the 

uncertainty about this relationship is the problem of measuring social performance, which is a multi-

dimensional construction that refers to a wide variety of topics. Their aggregation into a single form of 

measurement may suffer from inconsistency or lack of accuracy (Wang et al., 2015). The sign for the 

company to be socially accountable is associated to product concern, community, human rights, 

diversity and opportunity, employment quality, health and safety and training and development 

(Thomson Reuters, 2015). Barnett and Salomon (2012) enticed that firms with low corporate social 

practice have higher financial performance than firms with moderate corporate social practice, but 

firms with high corporate social practice have the highest financial performance (Indarawati, 

Ruhanita & Nor, 2016). 

Governance Practices 

The concept of corporate governance has received multiple meanings over time, being associated with 

management, accounting or auditing. It has often been used to describe actions taken to guide, direct 

and govern companies towards achieving business objectives. Corporate governance is defined as the 

“rules and practices by which companies are governed or run” (Encyclopӕdia Britannica, 2014). 

Corporate governance assumes the fundamental part in organization execution is to help the board's 

performance in controlling their business operations (Ponnu, 2008). Board of directors is one of the 

most important elements of corporate governance mechanism in overseeing the conduct of the 

company's business (Said, Zainuddin & Haron, 2009). The company follows the procedures and 

frameworks to ensure sustainability and be more progressive. The governance of corporate 

responsibility means that the company has specific systems for sustainability management (Klettner, 

Clarke, & Boersma, 2014). The emergence and further development of the concept of corporate 

governance have been associated with companies’ constant attempts to improve their business in an 

increasingly dynamic competitive environment (Noja, et al, 2024).   

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ISSN: 2836-9416 

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The studies also found that this relationship is stronger in countries with less stringent investor 

protection standards. Benvenuto et al. (2021) conducted a study in the Romanian and Italian banking 

systems and identified a significant and positive, lasting influence of the IGC (corporate governance 

index) on financial performance expressed as profitability in both countries.  

Performance 

The impact of environmental management activities on competitiveness and corporate economic 

success has been debated actively for many years. Financial and non-financial indices can directly 

reflect economic performance. Financial indices refer to sales, profitability, inventory turnover and 

return on equity while non-financial indices refer to market share, sale region and the number of 

customers (Earnhart & Lizal, 2010). 

The Economic indicator used in asset ESG is non-financial based. The economic performance 

measures a company's capacity to produce feasible development and a high return on investment 

through the efficient use of all its resources. It demonstrates a company's ability to improve its 

margins by increasing its performance (production process innovations) or by maintaining a loyal and 

productive employee and supplier base. The company's capacity is also to maintain a loyal 

shareholder by creating reasonable returns through a focused and transparent long-term 

communications strategy with its shareholders. The customer fulfillment and dependability produce 

feasible and long-term revenue growth (Thomson Reuters, 2015).  

Typically corporate environmental management practices relate to economic performance. By 

adopting new environmental practices such as reduce pollution source, more environmentally 

friendly ways of operation, etc., it can reduce waste disposal costs and penalty, thus, bringing about 

effective economic benefits for enterprises (Aragón-Correa, et al 2008). However, inconsistent 

findings were found in the empirical literature on the relationship between the environmental, social 

and economic performance. There is little evidence of a weak relationship and some for a weak but 

statistically significant positive relationship, negative to insignificant to moderately or even strongly 

positive relationships of environmental and economic performance (Orlitzky, Schmidt, & Rynes, 

2003). Margolis and Walsh (2003), documented that most studies support a positive correlation 

between the environmental performance and economic performance. 

Empirical Review 

Noja, Baditoiu, Buglea, Munteanu and Gligor Cimpoieru (2024) investigated the effectt of ESG 

reporting on company performance of financial and non-financial data of 2,400 companies. Main 

findings entail that ESG indicators had strong and medium effects on company performance, but 

these effects varied across different dimensions, requiring a tailored approach to embed ESG factors 

in corporate strategy to enhance overall performance. Cao, Duan, and Ibrahim (2024) analyzed effect 

of corporate underinvestment on environmental, social, and governance performance of Chinese A-

listed companies from 2011 to 2020. Data were analysed using OLS and two-stage least squares 

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American Research Journal of Economics, Finance and Management 

Volume 13 Issue 2, April – June 2025 

ISSN: 2836-9416 

Impact Factor: 6.41 

Journal Homepage: https://americaserial.com/Journals/index.php/ARJEFM 

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methods. The study showed a negative correlation between underinvestment and ESG ratings, 

particularly in the environmental and social dimensions. Habib (2023) analyzed a study titled ‘Does 

real earnings management affect a firm's environmental, social, and governance (ESG), financial 

performance, and total value?. The study employed PLS-SEM and moderation-mediation analysis. 

The study revealed that firms employing the REM have lower ESG and total enterprise value, whereas 

those using the ESG strategy have higher total enterprise value and financial performance. Kim and 

Lee (2023) conducted a study titled ‘Association between Earnings Announcement Behaviors and 

ESG Performances’. The final sample comprised of 17,370 firm-quarters of firms listed in Korean 

stock markets, including the KOSPI (Korea Composite Stock Price Index) and the KOSDAQ (Korea 

Securities Dealers Association Automated Quotation). The study period was from 2012 to 2018 in 

Korea. The data were analysed using OLS technique. The study disclosed that there is a negative 

association between earnings announcement and ESG scores. Rahcmatulloh, and Suranta (2023) 

analyzed the effect of Environmental, Social, and Corporate Governance (ESG) on a company's overall 

performance. The performance of the firm is assessed using various returns on assets, return on 

equity and Tobin's Q, which are regarded as reliance variables. The multiple linear regression 

techniques were employed for the study from 2018 to 2022. The study showed that the ESG index 

exerts a positive and statistically significant influence on ROA, ROE, and Tobin's Q. Enekwe, 

Ugwudioha and Uyagu (2023) studied the influence of environmental costs on the financial 

performance of listed oil and gas companies in Nigeria for a ten-year period from 2010 to 2019. The 

study employed Panel Ordinary Least Square of the multiple regression model was conducted using 

the E-views version 9.0 statistical software package. The study indicated that staff development costs 

have a negative but insignificant effect on listed Nigerian oil and gas companies' return on assets, 

while community development costs and employee health and safety costs have a positive but 

insignificant effect. Okoye and Erinugha (2023) ascertained the effect of environmental disclosure on 

the financial performance of listed Oil and Gas companies in Nigeria from 2011 to 2021. Descriptive 

statistics was used to analyze the data and inferential statistics was employed using Pearson 

correlation coefficient and Panel least square regression analysis to test the hypotheses of the study. 

The results showed that there is a significant and positive relationship between employee health and 

safety disclosure, waste management disclosure, environmental protection disclosure and cash value 

added. Nwanwu (2022) assessed the environmental management expenses and financial performance 

of Nigerian oil and gas firms for the period of nine (9) years from 2011 to 2018. The linear regression 

model and e-views statistical software were also adopted for the study. The study indicated that 

pollution costs have a positive and significant impact on the net profit of Nigerian oil and gas firms. 

Ekpose and Enidiok (2021) determined the effect of environmental costs on the financial performance 

of quoted Nigerian oil and gas firms from 2009 to 2019. Linear regression model were adopted for the 

study. The study showed that health-related costs (HRC) have a positive and significant influence on 

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Volume 13 Issue 2, April – June 2025 

ISSN: 2836-9416 

Impact Factor: 6.41 

Journal Homepage: https://americaserial.com/Journals/index.php/ARJEFM 

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profit margin (PM), while infrastructural development costs (IDC) and education program costs 

(EPC) have a positive but insignificant influence on the profit margin (PM) of quoted Nigerian oil and 

gas firms. Fazle, Ruzlin and Jeaneth (2021) ascertained the impact of sustainability (environmental, 

social and governance or ESG) practices on the financial performance (FP) of the Nordic financial 

industry from 2015–2019. This is a quantitative study using regression and a generalized method of 

moments. Using static and dynamic estimators, the authors found both positive and negative impacts 

of sustainability practice on FP. The study showed a negative relationship between ESG practices and 

FP (return on invested capital, return on equity and earnings per share). Helmi (2020) ascertained 

the effect of firm size, leverage, manufacturing type, family ownership and government ownership on 

corporate social and environmental voluntary disclosure in Saudi Arabia listed firms. The study 

employed regression model to run the analysis. The study shows that Saudi companies’ corporate 

social and environmental voluntary disclosure has improved over time when compared to previous 

studies to about 68% disclosure due to new corporate governance principles and IFRS application. 

Methodology 

The study used Ex Post Facto research design because it involves the evaluation of the behaviour of 

the same variables over an extended period of time. The panel nature of the data implies that the 

cross sectional research design is also applied because the sample objects of the study cover different 

firms for various years in order to determine their relationships and how significant one variable 

affects another.  

Population and Sample Size of the Study 

The population of the study consists of agricultural firms and healthcare firms in Nigerian Exchange 

Group as at year ended December 2023. the purposive sampling method was employed in selecting 

five agricultural firms and six health care firms listed on the Nigeria Exchange Group (NGX), 

considering the limited number of manufacturing firms listed on the with availability of Data which 

fall into eleven firms and the need to adopt an equal sample size for the purpose of the comparative 

analysis.  

Methods and Sources of Data 

The study used secondary data which were sourced from the various annual reports of the sampled 

manufacturing firms deposited in the libraries and website of the NGX. The research covered a period 

of twelve (12) financial years (2012-2023). The twelve-year period was used for the estimations in 

order to use information from the same accounting reporting regime (that is, IFRS) – especially since 

Nigeria adopted IFRS in 2012. 

Model Specification 

This study modified the model proposed by Yasin and Evren (2021). The model specified by, Yasin 

and Evren (2021) are as follows: 

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Volume 13 Issue 2, April – June 2025 

ISSN: 2836-9416 

Impact Factor: 6.41 

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FRQit= α + β1 ESGit + β2 SIZEit + β3 ROAit + β4 LEVit + β5 FIRM_AGEit + Σ YEAR + Σ INDUSTRY+ Σ 

COUNTRY + εit 

Where:  

FRQit = separately represents the models FRQ1, FRQ, FRQ 3 and FRQ 4 

ESGit = separately represents ESG, ENV, SOC, and GOV 

SIZEit = the natural logarithm of the market value of equity 

ROAit = Return on assets 

LEVit = Total liabilities/total assets 

FIRM_AGEit = The natural logarithm of 1 + age of firm 

The model was modified as follows: 

CVAi,t = β0 + β1EVDi,t + β2FSIZi,t  + ℮it …………………………………………………i 

CVAi,t = β0 + β1SPDi,t + β2FSIZi,t  + ℮it …………………………………………………ii 

CVAi,t = β0 + β1GVDi,t + β2FSIZi,t  + ℮it ………………………………………………..iii 

CVAi,t = β0 + β1EVDit + β2SPDit + β3GVDit + β4FSIZi,t  + ℮it ……………………....….iv 

Where: 

ENVit= environmental-related disclosures of firm i at period t. 

SPDit= social-related practices disclosures of firm i at period t. 

GOVit= governance-related disclosure of firm i at period t. 

FSIZEit = Natural logarithm of total assets of firm i at period t. 

Β0 = Intercept  

β1 – β4 = are the parameters to be estimated in the equation 

e = Stochastic error term. 

Method of Data Analysis  

Data were analyzed with descriptive statistics, and the hypotheses were tested inferential statistics 

(Pearson correlation, and multiple regression analysis). Since the focus of the study is to determine 

the significant effect, regression analysis becomes appropriate tool for it with aid of E-Views 9 using.  

Decision Rule 

The decision for the hypotheses is to accept the alternative hypotheses if the p-value of the test 

statistic is less or equal than the alpha and to reject the alternative hypotheses if the p-value of the test 

statistic is greater than alpha at 5% significance level. 

Results and Discussion 

Table 1 Descriptive Statistics 

 ROA EVD SRD GVD LEV 

 Mean  0.018004  20.83333  65.00000  48.33333  0.651202 

 Median  0.038882  25.00000  60.00000  60.00000  0.552922 

 Maximum  0.139515  25.00000  90.00000  60.00000  1.300714 

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 Minimum -0.171559  12.50000  50.00000  20.00000  0.444210 

 Std. Dev.  0.093134  5.915004  11.22293  17.30581  0.257391 

 Skewness -1.063207 -0.707107  0.715542 -0.912527  1.764143 

 Kurtosis  3.142527  1.500000  2.920000  1.968119  4.441675 

 Jarque-Bera  24.98071  23.37500  11.29920  24.17580  79.89979 

 Probability  0.000004  0.000008  0.003519  0.000006  0.000000 

 Sum  2.376500  2750.000  8580.000  6380.000  85.95865 

 Sum Sq. Dev.  1.136279  4583.333  16500.00  39233.33  8.678757 

 Observations  132  132  132  132  132 

Source: E-views 9 (2025) 

This study considered descriptive statistics (mean, standard deviation, minimum and maximum) for 

the panels for 132 observations (that is, 11 firms x 12 years). The table showed an average mean of 

0.018 for return on assets (ROA). The maximum value for is 0.14, minimum of -0.17 with a standard 

deviation of 0.093. Similarly, on environmental disclosure (EVD), the results showed that on the 

average the mean value is 20.833. The maximum figure of EVD for the sample firms is 25.000, while 

the minimum is 12.500, with a standard deviation of 5.915. On the average, social responsibility 

disclosure (SRD) stood at 65.000. The implication is that on the average, with a standard deviation of 

11.222, a maximum number of 90.00 and a minimum of 50.000. The mean value of governance 

disclosure (GVD) stood at 48.333. The minimum GVD stood at 20.000 while the maximum number 

of 60.000, with a standard deviation of 17.306. For firm leverage (LEV), the results showed that on 

the average the mean value is approximately 0.651. The maximum figure of LEV for the sample firms 

is 1.301 while the minimum is 0.444 with a standard deviation of 0.0058. 

Table 2: Pearson Correlation Matrix 

 ROA EVD CSRD GVD LEV 

ROA 1     

EVD 0.65561 1    

SRD -0.02233 0 1   

GVD 0.72946 0.95702 -0.04323 1  

LEV -0.94627 -0.61093 0.08218 -0.71031 1 

Source: E-Views 9 Correlation Output, 2025 

The outcome of the correlation matrix was presented in table 2. In the first part which focused on the 

Nigerian manufacturing firms, the measures of environmental disclosure (EVD) 0.656, and 

governance disclosure (GVD) 0.729 were positively correlated with the return on assets (ROA). While 

social practice disclosure (SRD) is -0.022 and firm leverage (LEV) -0.946 were negatively correlated 

with the return on assets (ROA). 

 

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Test of Hypotheses 

Table 3: Regression analysis between EVD, SRD, GVD and ROA  

Dependent Variable: ROA   

Method: Panel Least Squares   

Date: 06/04/25   Time: 19:29   

Sample: 2012 2023   

Periods included: 12   

Cross-sections included: 11   

Total panel (balanced) observations: 132  

     
     Variable Coefficient Std. Error t-Statistic Prob.   

     
     C 0.163445 0.022378 7.303763 0.0000 

EVD 0.003249 0.001564 2.077815 0.0397 

SRD 0.000390 0.000226 1.725419 0.0869 

GVD -0.000558 0.000600 -0.929179 0.3546 

LEV -0.324804 0.014694 -22.10384 0.0000 

     
     R-squared 0.908093     Mean dependent var 0.018004 

Adjusted R-squared 0.905198     S.D. dependent var 0.093134 

S.E. of regression 0.028676     Akaike info criterion -4.228382 

Sum squared resid 0.104433     Schwarz criterion -4.119184 

Log likelihood 284.0732     Hannan-Quinn criter. -4.184009 

F-statistic 313.7062     Durbin-Watson stat 1.551431 

Prob(F-statistic) 0.000000    

     
     In table above, the multiple regressions analysis was conducted to test the effect between 

environmental disclosures (EVD), social responsibility disclosure, Governance disclosure (GVD), firm 

leverage (LEV) and return on assets (ROA) of sampled manufacturing firms in Nigeria.  The Adjusted 

R-squared is 0.91, an indication that there was variation of 91% on ROA due to changes in EVD, SRD, 

GVD and LEV. This implies that 91% changes in ROA could be accounted for by EVD, SRD, GVD and 

LEV, while 9% was explained by unknown variables that were not included in the model.  

The Durbin-Watson Statistic of 1.551 suggests that the model does not contain serial correlation. The 

F-statistic of the regression is equal to 313.706. The associated F-statistical probability is equal to 

0.000. 

Hypothesis One  

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Ho1: Environmental practice has no significant effect on return on assets of manufacturing firms in 

Nigeria.   

The evidence provided by the regression result of the model showed that the variable of 

environmental disclosure had a positive coefficient of 0.0032 and a p-value of 0.040 which was 

significant at 5% level. 

Hypothesis Two 

Ho2: Social practice disclosure has no significant effect on return on assets of manufacturing firms in 

Nigeria.  

The evidence provided by the regression result of model showed that the variable of social practice 

disclosure had a positive coefficient of 0.000390 and a p-value of 0.087 which was significant at 5% 

level. 

Hypothesis Three 

Ho3: Governance practices disclosure has no significant effect on return on assets of manufacturing 

firms in Nigeria.  

The evidence provided by the regression result of model showed that the variable of governance 

practices disclosure had a negative coefficient of -0.000558 and a p-value of 0.355 which was 

significant at 5% level.  

Discussion of Findings 

The study regression result of the model showed that the environmental disclosure had a positive 

coefficient of 0.0032 and a p-value of 0.040 which was significant at 5% level. This result is in line 

with Omoye, and Wilson-'Oshilim, (2018) who found that firm size have significant and positive 

relationship with environmental disclosure. But Nur, Suganthi and Yuen (2023) results showed that 

individual Environmental score has a negative impact on ROA but a positive impact on ROE and 

Tobin’s Q. Also the study of Kim and Lee (2023) results showed a negative association between 

earnings announcement and ESG scores (i.e., earnings announcement on Friday and firms that omit 

preliminary earnings announcements). Yousra (2018) revealed that there is an insignificant 

relationship between Firm Size and environmental information disclosure.  

The hypothesis result showed that the variable of social practice disclosure had a positive coefficient 

of 0.000390 and a p-value of 0.087 which was significant at 5% level.  This result is in line with 

Rahcmatulloh, and Suranta (2023) which reported that the ESG has a positive and statistically 

significant influence on ROA.  This result disagreed with Nur, Suganthi and Yuen (2023) who showed 

that social disclosure on its own has an insignificant negative impact on on ROA.   

The evidence provided by the regression result of model showed that the variable of governance 

practices disclosure had a negative coefficient of -0.000558 and a p-value of 0.355 which was 

significant at 5% level. This result affirmed the finding of Nur, Suganthi and Yuen (2023) who found 

that the Governance practice disclosure has an insignificant effect on ROA.  

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Conclusion and Recommendations 

Conclusions  

This study determined the environmental, social and governance practices on corporate performance 

of two selected firms in Nigeria. The study employed environmental disclosure, Social disclosure and 

corporate governance disclosure as the independent variables and return on assets as the dependent 

variable. Data were analyzed with descriptive statistics, and the hypotheses were tested inferential 

statistics.  

The study regression result of the model showed that the environmental disclosure had a positive 

coefficient of 0.0032 and a p-value of 0.040 which was significant at 5% level. The hypothesis result 

showed that the variable of social practice disclosure had a positive coefficient of 0.000390 and a p-

value of 0.087 which was significant at 5% level.  The evidence provided by the regression result of 

model showed that the variable of governance practices disclosure had a negative coefficient of -

0.000558 and a p-value of 0.355 which was significant at 5% level.  

Company’s sustainability performance as shown by the ESG performance consists of the 

environmental, social, and governance aspects that must be maintained and improved from time to 

time. This can be structured by integrating the ESG framework, milestones, manufacturing firm’s 

activities and documentation of the ESG into the firm’s operation. By having sustainability ESG 

activities, company will have solid ESG performance by third party, leading to increased firm value for 

the firm that, in turn, will increase the welfare of the stakeholder.  

While the significance of specific ESG components varies, they all contribute to the creation of long-

term shareholder value. Companies that embrace ESG concerns not only align with changing societal 

expectations, but they also stand to improve their reputations, attract ethical investors, and ultimately 

contribute to the long-term increase of shareholder value. It is therefore safe to conclude that ESG 

variables and shareholder wealth emerges as a fundamental need for firms seeking long-term success 

in today's dynamic corporate market in Nigeria. 

Recommendations  

Based on the outcome of the study, the following are our recommendations: 

1. Since environmental, sustainability disclosures positively affects financial performance, the 

companies need to develop and publicize detailed environmental policies and practices. This includes 

reporting on emissions reductions, waste management, and resource conservation efforts.  

2. The manufacturing firms should advance and disclose creativities on corporate social 

responsibility matters, employee welfare, community engagement, and focus on social issues that are 

relevant to their operational areas, such as community health, education, and job creation, especially 

in regions impacted by oil and gas activities. 

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3. Governance sustainability disclosures were found to have the negative effect on firms’ 

performance. This suggested that investors are reluctant in placing high importance on transparency, 

ethical practices, and corporate accountability.  

 

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