Sustainable Supply Chain Reporting and Cost of Capital: Evidence from Nigerian Exchange Group Listed Firms

This study investigates the effect of sustainable supply chain reporting (SSCR) on the cost of capital, proxied by the weighted average cost of capital (WACC), of firms listed on the Nigerian Exchange Group (NGX). Motivated by increasing global attention on environmental, social, and governance (ESG) disclosures, and the underexplored landscape of supply chain sustainability reporting in sub-Saharan Africa, the study employs an unbalanced panel dataset of 148 Nigerian listed firms spanning 2010 to 2024, yielding 2,072 firm-year observations. Drawing on legitimacy theory, stakeholder theory, and information asymmetry theory, the study posits that robust sustainable supply chain reporting reduces informational opacity and moral hazard, thereby lowering investors' required rates of return. The study employs pooled ordinary least squares, fixed effects, random effects, and system generalised method of moments (GMM) estimators to address endogeneity, unobserved heterogeneity, and dynamic bias. Results consistently reveal a statistically significant negative relationship between SSCR and WACC across all estimation techniques, suggesting that firms disclosing more comprehensive sustainable supply chain information attract lower-cost financing. The findings are robust to alternative WACC proxies, sub-period and sub-sample analyses, industry segmentation, and variable winsorisation. Firm size, profitability, and liquidity further moderate this relationship, reinforcing resource-advantage and signalling perspectives. The study contributes novel evidence to the ESG-cost of capital nexus literature from an emerging market context and offers practical implications for corporate managers, regulators, and capital market participants in Nigeria and comparable developing economies.