Sustainable Development Practices and Corporate Financial Performance: A Survey of Selected Quoted Companies in Nigeria

Abstract

The present study investigated the relationship between sustainable development practices and corporate financial performance. The study adopted ‘ex-post facto’ research design. Data used for the study were sourced from annual reports and financial statements of thirty-four quoted companies selected from Agriculture, Basic materials, Consumer goods, Consumer services, Financial services, Health care, ICT, Industrials and the Oil and gas sectors of the Nigerian economy for the period 2011 to 2015. Content analysis was used to construct the sustainable development index. Multiple regression analysis techniques run on SPSS version 23 was used to test the hypotheses formulated in this study. Findings revealed a negative relationship between return on equity and sustainable development practices. A significant positive relationship was shown to exist between sustainable development practices and firm size, implying that firms with larger total assets adopt more sustainable development practices. No significant relationship was established between earnings per share and corporate sustainable development practices. The study recommended that corporate sustainability reporting be made compulsory through legislation, and the government should grant tax credit and other incentives to corporate entities that engage in sustainability practices to encourage them to contribute more to the much needed sustainable development.