ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (ESG) AND ITS EFFECTS ON THE PERFORMANCE OF A FIRM

ABSTRACT

This study examines the effects of Environmental, Social, and Governance (ESG) on the performance of a firm in Nigeria (a case study of Guinness industry) from 2012 to 2022. The study’s objective is to assess the impact of integrating environmental practices, social initiatives, and governance practices (ESG) on firm performance, to investigate the correlation between a firm size and its financial performance, and to evaluate the influence of firm’s age on firm performance. The study employed the ex-post facto research design using the Ordinary Least Squares (OLS) technique to establish the relationship between the dependent and independent variables. The analysis of the data revealed that there is no significant relationship between environmental practices, social initiatives, and governance practices (ESG) and firm performance, that firm size was found to have a significant relationship with firm performance and that there is no significant relationship between firm age and firm performance. The study concluded despite the non-significant relationship found between ESG practices and firm performance in this analysis, it is important to acknowledge the growing importance of ESG factors in the global business landscape and therefore recommends that businesses should be encouraged to integrate Environmental, Social, and Governance (ESG) factors into their corporate strategies and decision-making processes.