Sustainability reporting and financial performance of manufacturing companies in Nigeria: A mixed-methods analysis

Abstract

This study examines the impact of sustainability reporting on the financial performance of manufacturing companies in Nigeria, employing a mixed-methods approach that combines quantitative regression analysis with qualitative thematic review. The research is grounded in Stakeholder Theory, Legitimacy Theory, and the Resource-Based View (RBV), providing a comprehensive framework for understanding the relationship between Environmental, Social, and Governance (ESG) practices and financial outcomes. Quantitative analysis of 15 listed manufacturing firms over the period 2019-2023 reveals a statistically significant positive correlation between sustainability reporting and key financial performance indicators, including Return on Assets (ROA) and Return on Equity (ROE). The regression model explains 33.3% of financial performance variability, with a p-value of 0.031 indicating the significance of sustainability practices. Qualitative thematic analysis identifies three categories of barriers to sustainability reporting: individual factors (lack of expertise, time constraints, limited awareness), institutional factors (regulatory uncertainty, standardization challenges, lack of incentives), and organizational factors (cultural resistance, poor communication,
financial constraints). The findings demonstrate that robust ESG frameworks contribute to enhanced operational efficiency, improved stakeholder trust, and sustainable competitive advantage. The study offers actionable recommendations for manufacturing companies and policymakers, emphasizing the need for comprehensive reporting frameworks, capacity building, and regulatory   incentives. This research contributes to the growing body of literature on sustainability accounting in emerging economies and provides practical insights for advancing sustainable business practices in Nigeria’s manufacturing sector.