ESG Reporting and Financial Performance of Deposit Money Banks Nigeria


Ogboi, C.; Alalade, Yimka S. A.; Oluwayomi R. Oliyide & Sandra N. Momah

DOI10.5110/77. 1109               Page:   49-73           Vol: 19    Issue: 02   Year: 2024

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The growing recognition of the detrimental consequences of business operations on the environment and society has led to an increased demand for companies to openly communicate their environmental, social, and governance (ESG) practices. This research aims to assess the potential influence of ESG reporting on the financial performance of deposit money banks in Nigeria. To accomplish this, the study analyzed data obtained from the financial reports of selected deposit money banks in Nigeria spanning the period from 2013 to 2022. The appropriateness of the fixed effect model or random effect model was determined using the Hausman specification test. The empirical findings revealed that ESG disclosure has a positive and substantial impact on financial performance, indicating that banks that disclose their environmental performance tend to exhibit better financial performance. Furthermore, the analysis demonstrated that social costs have a positive impact on financial performance, albeit one that is not statistically significant. This implies that managing social costs does not necessarily enhance financial performance. On the other hand, board diversity was found to have a negative and significant effect on financial performance, suggesting that banks with more diverse boards tend to experience lower financial performance. Consequently, it is strongly recommended that companies enhance their ESG reporting practices in order to bolster their financial performance.


Environmental Disclosure, Corporate Governance, Social Cost, Deposit Money Banks. 

Received: 16 November 2023

Accepted: 22 January 2024

Published: 16 February 2024