ENHANCING FIRM PERFORMANCE: THE INFLUENCE OF SUSTAINABILITY PRACTICES ON RETURN ON CAPITAL EMPLOYED IN NIGERIA’S INDUSTRIAL GOODS SECTOR
Keywords:
Economic Sustainability Reporting, Environmental Sustainability Reporting, Return on Capital Employed, Social Sustainability Reporting, Sustainability PracticesAbstract
The study examined the effect of sustainability practices on the return on capital employed of industrial goods firms listed in Nigeria. The study specifically ascertained the effect of social sustainability reporting, economic sustainability reporting and environmental sustainability reporting affects return on capital employed of listed industrial goods firms in Nigeria. Ex-post facto research design was used in the study. Thirteen (13) listed industrial goods firms made up the population of the study, from which a purposive sample of seven (7) firms were chosen based on data availability. Secondary data were collected from the annual reports of the firms over a ten year period, from 2014 to 2023. Descriptive and Pearson Correlational analyses were used to give a summary of the nature of the data. Panel data regression was used in testing the hypotheses and the findings showed the following: Social Sustainability Reporting (SSR) has a significant positive effect on return on capital employed among listed industrial goods firms in Nigeria (β = 0.111156, p = 0.0000); Economic Sustainability Reporting (ECSR) has a significant positive effect on the return on capital employed among listed industrial goods firms in Nigeria (β = 0.953084, p = 0.0000); Environmental Sustainability Reporting (ENSR) has a significant negative effect on return on capital employed among listed industrial goods firms in Nigeria (β = -0.101237, p = 0.0000). In conclusion, by embedding sustainability into the fabric of their business operations, firms not only address stakeholder concerns but may also secure a competitive edge that supports sustained financial growth. The study recommends that managers of listed industrial goods firms in Nigeria should leverage social sustainability reporting by focusing on initiatives that align with community engagement and workforce development.
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