IIARD International Institute of Academic Research and Development

Journal of Accounting and Financial Management (JAFM )

E-ISSN 2504-8856
P-ISSN 2695-2211
VOL. 10 NO. 9 2024
DOI: 10.56201/jafm.v10.no9.2024.pg79.101

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Effect of Environmental, Social and Governance (ESG) Disclosures on Shareholders’ Wealth Maximization

Catherine Raphael Umanah and Dr. Dorathy Christopher Akpan

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Abstract

Companies in the world are putting up efforts to add values to their corporations’ bottom lines by engaging in sustainable business practices. However, it is quite worrisome that most companies particularly in Nigeria are not fully committed to the environment and society where they derive resources for their economic activities and they do not also have the desire to empower and promote corporate responsiveness to other stakeholders. The main objective of this study therefore was to examine the effect of environmental, social and governance (ESG) disclosures on shareholders’ wealth maximization drawing samples from industrial goods firms listed on the floor of the Nigerian Exchange Group from 2013-2022. The independent variable of this study being ESG disclosure was proxied by environmental performance disclosure, social performance disclosure and governance performance disclosure, while the dependent variable being shareholders’ wealth was proxied by Economic value added (EVA) and market value added (MVA). Expost facto research design was employed, secondary data were employed and purposive sampling technique was adopted to select twelve industrial goods firms. To test the hypotheses formulated and further analyze the study, ordinary least square regression technique was adopted and the statistical software used was E views version 10. From the analysis of the study, it was realized that environmental performance disclosure has a non-statistically significant positive effect on the economic value added; social performance disclosure has an insignificant positive effect on economic value added; governance performance disclosure has a significant positive effect on the economic value added; environmental performance disclosure has a significant positive effect on the market value added; social performance disclosure has an insignificant positive effect on market value added; governance performance disclosure has a significan

keywords:

Business practices, value added, market value added, economic value added, Nigerian

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