Sustainable supply chain management operations: does sustainable environmental disclosure matter for banks’ financial performance in Nigeria?

Abstract In recent years, banks have incorporated sustainable development strategies to achieve competitiveness in the financial market. However, the primary concern for banks is the financial pressure to implement sustainable environmental practices. In addition, banks are obliged by different regulators to maintain standards in conducting their business and allocating funds. Previous studies examined the relationship between sustainability reporting, corporate social responsibility (CSR), and firms’ financial performance. Few empirical studies examined the impact of sustainable supply chain management (SSCM) operations on firm financial outcomes, yet the banking sector has been ignored in the analyses. To bridge this gap, we examine the dynamic effect of SSCM operations on deposit money banks’ (DMBs) financial performance. We selected seven banks in Nigeria with national, regional and international authorization and data spanning from 2005 to 2023. Based on the panel co-integration test and the Cross-sectional Dependence Autoregressive Distributed Lag model (CS-ARDL) model, we found that SSCM operations have a significant influence on the financial performance (market value and profitability) of the banks. Impliedly, banks’ SSCM operations and environmental consideration in the allocation of funds drive their corporate image and value. Integration of SSCM strategies for a sustainable environment can help enterprises/companies bridge information asymmetry among diverse stakeholders. We offer some policy suggestions in line with the empirical findings.