Assessment of ESG Criteria in Financial Reporting Process: A Comparative Analysis of Nigeria’s and Kenya’s Selected Quoted Companies

• Author(s): Ummukulthum Bello Sulaiman ; Sunkanmi Fadoju ; Nuradeen Abdulsalam
• Paper ID: 1708494
• Page: 880-887
• Published Date: 16-05-2025
• Published In: Iconic Research And Engineering Journals
• Publisher: IRE Journals
• e-ISSN: 2456-8880
• Volume/Issue: Volume 8 Issue 11 May-2025

Abstract

This study examines the impact of Environmental, Social, and Governance (ESG) criteria on the financial performance of selected quoted companies in Nigeria and Kenya, using panel data from 2015 to 2023. Employing quantitative methods and regression analysis, the study investigates ESG disclosures across 10 firms—five each from Nigeria and Kenya. The results reveal a significant positive relationship between ESG reporting and financial performance indicators, namely Return on Assets (ROA) and Return on Equity (ROE). In Nigeria, ESG reporting accounted for 45–48% of the variance in financial performance (R² = 0.45–0.48), while in Kenya, the explanatory power was slightly higher at 40–50% (R² = 0.40–0.50). Notably, the coefficient of Social Sustainability Reporting (SSR) on ROE was 0.32 in Nigeria and 0.35 in Kenya, indicating its strong influence. Similarly, Governance Reporting (GR) showed a coefficient of 0.30 and 0.32 on ROE in Nigeria and Kenya, respectively. These findings underscore that robust ESG practices positively influence profitability and corporate sustainability. The study recommends enhanced regulatory enforcement and standardized ESG disclosure frameworks to foster transparency and improve firm performance in emerging markets.

Keywords

ESG Reporting, Financial Performance, Sustainability, Disclosure

Citations

IRE Journals:
Ummukulthum Bello Sulaiman , Sunkanmi Fadoju , Nuradeen Abdulsalam "Assessment of ESG Criteria in Financial Reporting Process: A Comparative Analysis of Nigeria’s and Kenya’s Selected Quoted Companies" Iconic Research And Engineering Journals Volume 8 Issue 11 2025 Page 880-887

IEEE:
Ummukulthum Bello Sulaiman , Sunkanmi Fadoju , Nuradeen Abdulsalam "Assessment of ESG Criteria in Financial Reporting Process: A Comparative Analysis of Nigeria’s and Kenya’s Selected Quoted Companies" Iconic Research And Engineering Journals, 8(11)