Climate Finance, ESG, and Green Transition in Nigeria

This article examines the intricate relationships between climate finance, Environmental, Social, and Governance (ESG) factors, and green transition in Nigeria. Drawing on theoretical frameworks from institutional economics, stakeholder theory, and sustainability finance, this study conceptualizes climate finance as the independent variable driving green transition outcomes in Nigeria, with ESG serving as a moderating variable that amplifies or attenuates this relationship. The analysis incorporates twelve control variables, firm size, return on assets (ROA), leverage, board independence, industry type, capital intensity, GDP per capita, GDP growth, institutional quality, financial development, energy prices, and trade openness, to isolate the net effects of climate finance on Nigeria's green transition trajectory. The findings suggest that while Nigeria possesses enormous potential for a successful green transition, the effectiveness of climate finance is significantly moderated by ESG compliance levels across firms and sectors. Policy implications, empirical insights, and strategic recommendations are provided for policymakers, investors, and corporate actors navigating Nigeria's complex sustainability landscape.