SUSTAINABILITY REPORTING AND FINANCIAL STABILITY OF LISTED FIRMS IN NIGERIA
DOI:
https://doi.org/10.18623/rvd.v22.n3.3545Keywords:
Financial Stability, Sustainability Reporting, Listed Entities, NigeriaAbstract
Sustainability reporting offer insights into an organization’s environmental, social, and governance performance, emphasize significant challenges, and outline the organization’s reform strategies. It then becomes imperative for a company to device a sustainability strategy if they must survive in this century. However, ignoring the environment while trying to achieve the goal of the organization will not only make things worse, but will make businesses unsustainable in the long run. The effect of sustainability reporting on the financial stability of listed entities in Nigeria was investigated using a quantitative approach, with data extracted from the annual reports of 76 listed companies spanning a period of fourteen years (2010–2023). The sustainability reporting variables included economic, environmental, social, and governance disclosures, while the performance indicators comprised profitability, financial stability, liquidity, investment returns, and corporate image. Panel regression analysis, specifically the random effects model, was conducted based on the Hausman test results, ensuring robust and reliable findings. Financial stability, as measured by the Debt-to-Equity Ratio (DTER), was found to be significantly influenced by sustainability reporting, with varying effects across its dimensions. Economic disclosures were positively associated with financial stability. Environmental disclosures exhibited a strong negative effect on financial stability. Social disclosures were positively related to financial stability. Governance disclosures were found to have an insignificant effect on financial stability. The results of this study align with stakeholder theory, which posits that addressing stakeholder concerns, such as economic and social transparency, enhances financial outcomes.
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