ESG Reporting, Firm Value and Profitability in the Extractive Industry of Sub‐Saharan Africa: The Moderating Role of Regulatory Compliance

ABSTRACT This study examines the relationship between environmental, social and governance (ESG) reporting and firm performance among extractive firms in sub‐Saharan Africa (SSA), while assessing the moderating role of regulatory compliance. Using a balanced panel dataset of 35 listed oil, gas, and mining firms from seven countries over the period 2012–2023, the study employs the two‐step system generalised method of moments (System GMM) estimator to address dynamic panel effects, endogeneity, and unobserved heterogeneity. The findings reveal that environmental, social, and governance reporting are positively associated with both firm value and profitability, with governance reporting exhibiting the strongest association. The results further indicate that regulatory compliance positively moderates the relationship between ESG reporting and firm performance. The study contributes to the ESG reporting literature by providing evidence from the underexplored context of SSA's extractive industry and highlighting the importance of institutional conditions in shaping ESG reporting outcomes.