DOES SCOPE-BASED CARBON DISCLOSURE DRIVE SHAREHOLDERS’ VALUE? A MULTIVARIATE ANALYSIS OF NIGERIAN FIRMS

Abstract

This study investigates the impact of scope-based carbon emissions (Scope 1, Scope 2, and Scope 3) and sustainability reporting on the market valuation of firms listed on the Nigerian Exchange Limited (NGX). Using multivariate regression on panel data covering nine firms from 2012 to 2023, the findings reveal that Scope 2 emissions have a statistically significant positive effect on firm value, measured by Tobin’s Q, indicating investor sensitivity to indirect emissions linked to operational efficiency. In contrast, Scope 1 and Scope 3 emissions, as well as sustainability reporting, showed no significant influence, suggesting challenges related to the credibility or materiality of these disclosures in Nigeria. The results reveal the need for improved standardization and verification of emissions and sustainability disclosures to enhance their relevance for investors.