Determinants of Environmental, Social, and Governance Performance in Nigeria

This study investigates the determinants of Environmental, Social, and Governance (ESG) performance in Nigeria, focusing on factors influencing corporate sustainability practices in this emerging economy. Data were collected from 153 listed companies in Nigeria between 2014 and 2023 using a quantitative research approach. The methodology includes panel data analysis and a multiple regression model to examine the relationship between ESG performance and firm-specific factors such as firm size, profitability, board diversity, board size, board independence, audit quality, and foreign ownership. The findings reveal that audit quality, board gender diversity, board independence, board size, institutional ownership, and firm size positively and significantly impact ESG performance, while firm profitability and leverage show insignificant impacts. The conclusion highlights that ESG performance in Nigeria is largely driven by audit quality, board gender diversity, board independence, board size, institutional ownership, and firm size. The implications of this research are critical for policymakers and business leaders aiming to enhance corporate sustainability. The study suggests that creating policies to incentivize smaller and domestically-owned companies to adopt ESG practices could improve Nigeria's overall sustainability performance. Recommendations include increasing awareness of ESG importance at both the corporate and regulatory levels, promoting board diversity, and providing tax incentives for ESG-compliant firms. The study also encourages foreign investors to play a larger role in driving sustainable business practices. The limitations of the research include its focus on publicly listed firms, which may not represent the entire business landscape in Nigeria, and the exclusion of qualitative insights from corporate managers. Future studies could explore the role of institutional frameworks in ESG adoption. This study contributes original insights into the drivers of ESG performance in Nigeria, a region that has received limited attention in ESG literature, thus offering valuable perspectives for emerging markets.