Sustainability Reporting and Financial Performance among Listed Fast-Moving Consumer Goods (FMCG) Companies in Nigeria

This study explores the relationship between Sustainability Reporting and the Financial Performance of listed Fast-Moving Consumer Goods (FMCG) companies in Nigeria. Sustainability reporting was measured across three dimensions: Environmental Sustainability Performance (ESP), Social Sustainability Performance (SSP), and Economic Sustainability Performance (ECSP), as defined by GRI. Financial performance was approximated by Earnings per Share (EPS), Dividend per Share (DPS), and Return on Equity (ROE) for listed FMCG firms in Nigeria.

The research uses an ex-post-facto design and applies a simple OLS regression to examine the connection between the variables. The population includes 16 firms in that sector as of December 2023, with a purposive sample of 12 firms that had complete data for the period. Findings show that ESP has a weak negative correlation with EPS, indicating a possible decline in performance with increased environmental efforts; however, this relationship is not statistically significant. Positive correlations between SSP and ESP, and between ECSP and ESP, suggest a direct positive effect on financial performance. ROE indicates a negative impact of ESP and SSP but a significant positive effect of ECSP.

Additionally, the Breusch-Pagan Lagrange Multiplier (LM) test rejects the null hypothesis, indicating cross-sectional dependence among residuals, which confirms the suitability of the random effects model. The study recommends that companies adopt a more integrated approach to sustainability, considering the interactions among environmental, social, and economic factors for balanced development.