Impact of Environmental, Social and Governance (ESG) Disclosure on Financial Performance of Listed Deposit Money Banks in Nigeria

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Authors: Bukar Musa, Abubakar Mahmud Bello and Zahraddeen Abbas Bello

Abstract

All industries are beginning to prioritize environmental goals, and since banks play a critical role in almost every industry as lenders, it is important to research how ESG affects a bank's performance. The main objective of the study was to investigate how ESG disclosure impact on financial performance of selected listed deposit money banks in Nigeria, an ex-post facto research design was used to purposefully select a sample of 5 banks out of the 8 that met the researcher’s population definition. And content analysis was used to obtain data from published annual statements.  ESG with its subdivision into ES, SS and GS made up the independent variables while financial performance proxied by ROA is the dependent variable. Pooled regression was used to establish the relation using SPSS 20 package. The results show that a negative and insignificant effect on ROA by ES and SS. It is only GS that show a positive and significant impact. The study therefore recommends a holistic regulation on disclosure of ESG, even though Nigeria is a party to the Basel sustainable banking initiative, but its domestication would enhance disclosure.

Keywords: Environmental, Social, Governance, Financial performance, ROA Disclosure

2025 - NIJAF - 17 - 104 Bukar ET AL..pdf

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