EFFECT OF SUSTAINABILITY DISCLOSURES ON FIRMS’ VALUE OF LISTED NON-FINANCIAL COMPANIES IN NIGERIA

The emergence of economic, environmental, and social reporting has contributed to the recent rise in popularity of sustainability disclosures. In light of this newfound understanding, investors are anticipated to prefer companies with superior sustainability reports when making investment choices. This research evaluated the influence of sustainability disclosure on the valuations of publicly listed non-financial companies in Nigeria. Specifically, the study investigated how the triple bottom line (TBL), encompassing economic, environmental, and social dimensions, affects firm value. Ex-post factor and longitudinal research methodologies were utilized. The total population comprised all 108 non-financial companies listed on the Nigerian Public Exchange as of December 31, 2023. Owing to the availability of comprehensive data, a purposive sampling method was applied to select 47 firms listed as of 2023. The data collected were sourced secondarily from the audited financial statements of the non-financial firms in Nigeria. The research spans a timeframe of 14 years, from 2010 to 2023. The analyzed data employed both descriptive and inferential (Fixed Random) statistical techniques. The results indicated that the TBL significantly influences firm value (Tobin’s Q). The specific findings for individual variables revealed that economic performance, which serves as an indicator of economic sustainability, is significant with a z-statistic of 2.08 and a p-value of 0.038; materials, representing environmental sustainability, is also significant with a z-statistic of -2.31 and a p-value of 0.021; and the non-discrimination policy, as a measure of social sustainability, is significant, presenting a p-value of 0.000 and a z-statistic of 4.18. It is advised that Nigeria’s listed non-financial institutions give priority to sustainability practices and share their sustainability performance with stakeholders to enhance their financial outcomes. Additionally, the study recommends that the government create a policy framework for sustainability disclosures and ensure adherence by establishing mechanisms and institutions for the implementation of the Global Reporting Initiative (GRI), particularly within manufacturing sectors.