Abstract
Worldwide momentum toward sustainable business operations has fundamentally transformed how corporations communicate their activities, necessitating the incorporation of environmental, social and economic dimensions into conventional financial statements. In emerging economies such as Nigeria, sustainability reporting remains voluntary and fragmented, yet manufacturing companies are increasingly under pressure from stakeholders, regulators and international investors to demonstrate accountability. This research investigates how sustainability reporting, encompassing environmental, social and economic dimensions, influence the valuation of Nigerian listed manufacturing firms as assessed through Tobin’s Q. Grounded in stakeholder, legitimacy and institutional theoretical frameworks, this investigation utilizes panel data from 40 publicly traded manufacturing enterprises covering the 2019 2023 period, yielding 200 firm year observations. Disclosure indices were developed based on Global Reporting Initiative (GRI) framework standards, with analytical techniques encompassing pooled OLS, fixed effects and random effects panel regression specifications. Findings reveal that environmental and economic disclosures exert significant positive effects on Tobin’s Q, while social disclosures show only a weak but positive influence. Based on Hausman specification testing, the fixed effects specification emerged as the optimal analytical approach, indicating that firm specific characteristics significantly moderate the sustainability performance relationship. The results highlight the growing relevance of sustainability disclosures in shaping market based measures of firm performance in Nigeria, though challenges persist regarding disclosure quality and regulatory enforcement. This work extends the global body of knowledge on sustainability reporting by offering empirical insights from an emerging market setting, with implications for policy, practice and future research.
Keywords: Corporate performance; ESG disclosures; Nigerian manufacturing firms; sustainability reporting; Tobin’s Q