ENVIRONMENTAL, SOCIAL, AND GOVERNANCE INVESTMENT AND FINANCIAL PERFORMANCE IN LISTED MULTINATIONAL FIRMS IN NIGERIA

The integration of Environmental, Social, and Governance (ESG) principles has transitioned from a peripheral concern to a central strategy for long-term corporate resilience and value creation. This study investigates the effect of ESG investment on the financial performance of listed multinational firms in Nigeria. The specific objectives were to examine the effect of environmental disclosure, determine the impact of social disclosure, and assess the influence of governance structure on the financial performance of these firms. The study employed an ex-post facto research design, utilizing secondasssry data meticulously sourced from the annual reports and sustainability reports of the selected firms. The population comprised all 61 listed multinational firms on the Nigerian Exchange Group (NGX) as of December 31, 2023. A sample of 40 firms was selected using a simple random sampling technique. The data, spanning a ten-year period from 2014to 2023, was analyzed using pooled Ordinary Least Squares (OLS) regression. The findings revealed the following: environmental disclosure [coef. = 0.491 (0.815)] had a positive but statistically insignificant effect on financial performance (measured by Return on Assets); social disclosure [coef. = 1.222 (0.577)] also exhibited a positive but insignificant effect. Conversely, governance disclosure [coef. = -12.285 (0.000)] had a significant negative effect on financial performance. The study concludes that while environmental and social disclosures are not yet significant drivers of profitability in the Nigerian context, current governance disclosure practices may impose net costs on firms. It is recommended that corporate managers move beyond compliance-focused reporting to strategically integrate substantive ESG initiatives into core business operations. Furthermore, policymakers and regulators should develop more robust and standardized ESG reporting frameworks to enhance transparency and ensure that sustainability practices contribute meaningfully to firm value.