Effect of Environmental, Social, and Governance (ESG) Practices on Economic Value Added (EVA) of Listed Consumer Goods Companies in Nigeria

Authors

Abstract

This study investigates the effect of Environmental, Social, and Governance (ESG) practices on Economic Value Added (EVA) among listed consumer goods companies in Nigeria from 2013 to 2024, addressing the persistent challenge of EVA underperformance amid economic volatility, high inflation, and operational inefficiencies. Utilizing a Panel Estimated Generalized Least Squares (EGLS) model with cross-section random effects, the study analyzed data from 12 purposively sampled firms listed on the Nigerian Exchange Group (NGX). The regression results revealed that environmental disclosure, social disclosure, and governance disclosure have significant positive effects on EVA at the 5% significance level, rejecting the null hypotheses that these ESG components have no effect on EVA. The recommended amongst others that; Companies should invest in sustainable practices, such as eco-friendly packaging, energy-efficient production, and emissions reduction link to EVA increases through cost savings and investor appeal. Adopting standardized environmental reporting frameworks, such as those aligned with the Nigerian Exchange Group’s (2024) sustainability guidelines, can enhance credibility and attract green financing, reducing WACC. Firms should also conduct regular environmental audits to ensure compliance and signal commitment to sustainability, addressing Nigeria’s environmental vulnerabilities like resource scarcity.

Keywords

Environmental, Social, and Governance (ESG), Economic Value Added (EVA)

DOI

10.0000/wijamssae.v1i3.effect-of-environmental-social-and-governance-esg

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