Environmental, Social and Governance (ESG) Disclosure and Financial Performance of Selected Listed Consumer Goods Firms in Nigeria

Abstract

Environmental, Social, and Governance (ESG) disclosure has become increasingly important for enhancing corporate transparency and sustainable value creation. However, empirical evidence on its effect on financial performance remains inconclusive, particularly in Nigeria, where previous studies have largely relied on aggregate ESG measures and provided limited evidence for the consumer goods sector. This study examined the effect of environmental, social, and governance disclosures on the Return on Equity (ROE) of selected listed consumer goods firms in Nigeria. An ex post facto research design was adopted using secondary data from the annual reports of five purposively selected firms covering 2015–2025. ESG disclosure indices were developed using the Global Reporting Initiative framework, and panel regression techniques were employed for analysis. The findings revealed that environmental, social, and governance disclosures each had a positive and statistically significant effect on ROE, with governance disclosure exerting the strongest influence. Firm size positively affected financial performance, while leverage had a significant negative effect. The study contributes by providing disaggregated, sector-specific evidence on the ESG–financial performance nexus in Nigeria. The findings suggest that firms should strengthen ESG reporting, while regulators should enhance ESG disclosure standards to improve corporate transparency, investor confidence, and sustainable financial performance.