Green governance and investor value: An empirical study of sustainability practices among Nigerian listed industrial firms

Abstract

Type of the article: Research ArticleAbstractThe study considers the impact of green governance on investor wealth through the sustainability performance of manufacturing firms in Nigeria from 2015 to 2024. The green governance variables considered in the study include environmental expense ratio, sustainability index score, social expense ratio, and environmental, social, and governance (ESG) facilitators score against earnings per share (EPS) as a proxy for investor wealth. The study adopts the ex post facto research design. This paper employed fixed-effects panel regression to analyze panel data from Dangote Cement, Lafarge Africa, and BUA Cement. The model has an overall predictive ability of 67.4%; therefore, the model was found to be appropriate (p = .001, F = 12.83). The sustainability index score (β = 0.186, p = 0.013), social expense ratio (β = 5.487, p = 0.027), and ESG facilitators scores (β = 0.212, p = 0.018) were found to be significantly and positively related to profitability, while the environmental expense ratio (β = – 1.908, p = 0.312) was found to be non-significant. It can be argued based on the findings that sustainability initiatives combined with social investment and transparent governance practices can increase the wealth of investors. But the environmental expense ratio might take more time before it turns into profitability. The research findings highlighted the theoretical and practical importance of long-term investment in sustainability practices.