ABSTRACT

This study investigated the effect of ESG disclosures on firm financial performance in listed companies operating in environmentally sensitive industries in Nigeria between the period of 2015 to 2020. The study focused on companies listed as consumer goods because the sector had the highest number (21) of environmentally sensitive companies.

Three hypotheses were developed, evaluated using the generalised least squares estimator, and tested at a significance level of 5%. This estimator was used because of the issue of autocorrelation and heteroskedasticity observed with the dataset.

From the findings, it was observed that environmental and social disclosures had significant effects on the financial performance of the sampled companies while governance disclosures did not have any significant effects. In line with this findings, we recommended that: companies should improve on environmental related disclosure to improve their performance; and companies should weigh the cost-benefits of social disclosure to mitigate the negative cost implications on their financial performance.