OLAOYE Ayoola Azeez, Ph. D, ACA1 AJISEKOLA Adeoluwa Clement2
ADEGOKE Jonathan Funminiyi, Ph. D3
1Department of Accounting
University of Ilesa, Ilesa, Osun state, Nigeria Corresponding Author: E-mail: ayoola_olaoye@unilesa.edu.ng, olaoyeazeez@gmail.com
2Department of Business Education
University of Ilesa, Ilesa, Osun state, Nigeria
3Department of Business Administration University of Ilesa, Ilesa, Osun state, Nigeria
Abstract
This study investigated how the market performance of multinational companies listed in Nigeria is affected by environmental, social, and governance (ESG) disclosures. The study employed a quantitative research approach to examine the relationship between cumulative abnormal returns and ESG disclosure metrics, such as environmental disclosure indices and the overall ESG index. The research used a panel data regression approach and descriptive statistics for data estimation. The findings from the research revealed that higher ESG transparency enhances investor confidence, leading to improved market performance. Specifically, environmental disclosures significantly reduced abnormal returns, reflecting positive investor sentiment. By applying legitimacy theory, the research demonstrated how firms strategically disclose ESG information to enhance credibility and attract the potential investors. The study concluded that market performance of listed multinational companies in Nigeria is significantly improved by ESG transparent disclosures which also demonstrated that robust ESG disclosures boost investor confidence and stock market performance stability. The study suggested urging investors to give ESG disclosures top priority when making financial decisions in order to enhance company transparency and regulatory ESG reporting frameworks. Also, for any corporate executives and investors attempting to negotiate the changing terrain of ESG disclosures-driven and improved market performance, these insights are essential.
Keywords: Cumulative abnormal returns, environmental disclosure metrics, overall ESG index, market performance, multinational companies, Nigeria.