Corporate sustainability reporting and financial performance of likelihood distress companies in Nigeria

Aniefor, Sunday  Jones; Onatuyeh Edwin  Aruobogha; Ogbolu Lucky  Mmamefune; Orife Catherine  Ogheneovo; Osevwe-Okoroyibo Eloho

doi:10.33094/ijaefa.v20i1.1926

Authors

Aniefor, Sunday Jones Department of Accounting, Delta State University of Science and Technology, Ozoro, Delta State, Nigeria. https://orcid.org/0000-0002-0476-3668
Onatuyeh Edwin Aruobogha Department of Accounting, Delta State University of Science and Technology, Ozoro, Delta State, Nigeria. https://orcid.org/0000-0001-5252-8681
Ogbolu Lucky Mmamefune Department of Accounting, Delta State University of Science and Technology, Ozoro, Delta State, Nigeria. https://orcid.org/0009-0008-0865-6617
Orife Catherine Ogheneovo Department of Accounting, Delta State University of Science and Technology, Ozoro, Delta State, Nigeria. https://orcid.org/0000-0002-0476-3668
Osevwe-Okoroyibo Eloho Department of Accounting, Delta State University of Science and Technology, Ozoro, Delta State, Nigeria. https://orcid.org/0009-0006-8675-8841

DOI:

https://doi.org/10.33094/ijaefa.v20i1.1926

Keywords:

Corporate governance, Economic, Environmental, Financial performance and likelihood of financial distress, Social responsibility, Sustainability reporting.

Abstract

This study explored the interplay between corporate sustainability reporting and the financial performance of likelihood distressed listed companies in Nigeria. This study employed an ex-post facto research design spanning a longitudinal period of five years (2018–2022). The sample size comprises one hundred and nineteen firms listed on the Nigerian Exchange Group (NGX), formally known as the Nigeria Stock Exchange (NSE). The study data were analysed using the random effect panel regression technique based on the outcome of the Hausman selection test. The study’s result indicated that both corporate social responsibility and economic performance exhibited a significant and positive relationship with the performance of the likelihood distressed companies implying an increase in corporate financial performance based on data extracted from the audited annual reports of the sampled firm. Surprisingly, environmental performance reporting demonstrated a negative and non-significant relationship with financial performance. Corporate governance practice displayed a positive but non-significant relationship with financial performance. Therefore, this study recommends that the management of the sampled companies should improve social responsibility and economic disclosures as they positively affect corporate financial performance. It is also recommended that companies disclose only material information especially concerning environmental sustainability performance to improve corporate financial performance.