Agricultural Extension Messages to Local Farmers for Enhanced Productivity through Environmental, Social and Governance Disclosures and Cost of Debt of Listed Consumer Goods Companies in Nigeria

Authors

Abstract

This study examined the effect of environmental, social and governance (ESG) disclosures on the cost of debt of listed consumer goods companies in Nigeria over the period 2016–2025. The study adopted an ex-post facto research design and purposively selected 12 of the 21 listed consumer goods companies based on the availability and consistency of relevant information. Secondary data were obtained from the audited annual reports and accounts of the sampled companies, resulting in 120 firm-year observations. Environmental, social and governance disclosures were measured using content-analysis indices, while cost of debt was measured as interest expense divided by total debt. Panel regression techniques were employed, with the Hausman specification test supporting the use of the random-effects model. Diagnostic tests were also conducted, and robust standard errors were applied in the final estimation. The findings revealed that environmental disclosure had a significant negative effect on cost of debt (β = −0.736, p = 0.019), while social disclosure also had a significant negative effect (β = −1.543, p = 0.015). In contrast, governance disclosure had a significant positive effect on cost of debt (β = 0.277, p = 0.031). The model explained 39.9% of the variation in cost of debt and was statistically significant. The study concludes that ESG disclosure does not exert a uniform influence on debt financing costs. Environmental and social transparency appear to reduce creditors’ perceived risk, whereas governance disclosure may reveal governance-related risks or weaknesses that influence borrowing costs. The study recommends that listed consumer goods companies improve the quality, credibility and consistency of ESG disclosures, while regulators should strengthen standardized and enforceable ESG reporting requirements in Nigeria.

Keywords

Environmental disclosure, social disclosure, governance disclosure, ESG disclosure, cost of debt, consumer goods companies, Nigeria.

DOI

10.0000/wijamssae.v1i3.agricultural-extension-messages-farmers-f

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