Corporate Commitment to Sustainability Practices among Listed Companies in Nigeria
Keywords:
Sustainability reporting, committment to sustainability practices, financial and non-financial information, RDAP model, stakeholders
Abstract
This study investigates the level of corporate committment to sustainability practices among listed companies in Nigeria, from 2012 – 2018. Thirty-one quoted companies constitute the sample selected from the consumer goods, industrial goods, healthcare and oil and gas sectors; using judgmental sample techniques because their activities have a great impact on the environment. Both quantitative and qualitative methods of data analysis are adopted using Ex-post facto research design. The study adapts Reactive-Typology model to classify companies according to their level of committment to sustainability practices (SP) following some set criteria from disclosures made in their annual reports. These criteria include backward and forward strategy statements, presence of sustainability board committee, employees’ training on environmental issues, and sustainability measures as one of the key performance indicators for managers. The categorization is done using content analysis and analysis of variance (ANOVA) is used to examine the differences in commitment level to SP at 5% significant level. The study found that all companies are committed to corporate sustainability practices and communicated these practices through disclosure in their annual reports but at different level of commitment. Most companies are in the reactive category with minimal improvements over the years. The study concludes that there are significant differences in the level of corporate commitment to sustainability practices among listed companies in Nigeria. It is recommended that regulatory authorities should intensify efforts to regulate and enforce implementation of sustainability reporting among quoted companies in Nigeria.
References
References
Adams, C. & Zutshi, A. (2004). Corporate social responsibility: Why business should act responsibly and be accountable. Australian Accounting Review, 14(3), 31-39.
Ajape, K. M. (2019). Environmental sustainability disclosure practices and economic performance of selected listed firms in some states in Nigeria (Doctoral dissertation, University of Lagos).
Aifuwa, H. O. (2020). Sustainability reporting and firm performance in developing climes: A review of literature. Copernican Journal of Finance & Accounting. 9 (1), 9 – 29
Ajibolade, S. O. & Uwuigbe, O. (2013). Managerial ownership, audit quality and corporate financial performance in Nigeria. Global Journal of Accounting, 3 (1), 60 – 78
Ajibolade, S. O. & Oyewo, B. (2017). Firm characteristics and performance disclosures in annual reports of Nigerian banks using the balanced scorecard. Euro Economica, 36(1), 94 – 112.
Ameer, R., & Othman, R. (2012). Sustainability Practices and Corporate Financial Performance: A Study Based on the Top Global Corporations. Journal of Business Ethics, 108(1), 61-79.
Bieker, T (2003). Sustainability Management with the Balanced Scorecard. Conference proceedings of 5th International Summer Academy on Technology Studies, pp. 17–34.
Brammer, S., & Pavelin, S. (2006).Voluntary environmental disclosures by large UK companies. Journal of Business Finance and Accounting, 33(7 /8), 1168-1188.
Branco, M., & Rodrigues, L.L. (2007), “Positioning stakeholder theory within the debate on corporate social responsibility”, Electronic Journal of Business Ethics and OrganizationStudies, 12 (1), 5-15.
Brundtland, G. H. (1987). Our common future. United Nations World Commission on environment and development (Brundtland Commission). Oxford: Oxford University Press. ISBN:01928280X
Burlea, S. A., & Popa, I. (2013). Legitimacy theory, in encyclopedia of corporate social responsibility. Spinger-Verlag, Berlin Heidelberg. 1579 - 1584
Buysse, K. & Verbeke, A. (2003). Proactive environmental strategy. A stakeholder management perspective. Strategic Management Journal, 24 (5), 453-470
Buzzelli, D. T. (1993). Time to structure an environmental strategy. Journal of Business Strategy, 12 (2), 17-20
Clarkson, M. (1995). A statkeholder framework for analyzing and evaluation corporate social performance. Academy of Management Review, 20 (1), 92-117
Clarkson, P.M., Li, Y., Richardson, G.D., & Vasvari, F.P. (2008).Revisiting the relation between environmental performance and environmental disclosure: An empirical analysis. Accounting, Organizations andSociety, 33(4-5), 303-327.
Deegan, C. & Gordan, B. (1996). A study of the environmental disclosure practices of Australian corporations. Accounting and Business Research, 26 (3), 187-199.
Deegan, C. (2002). The legitimizing effect of social and environmental disclosures-a theoretical foundation. Accounting, Auditing & Accountability Journal, 15(3), 282-311.
Deloitte, (2019): Greenwashing or measurable results? Sustainability and integrated reporting – An analysis of the 50 largest companies in Norway. Retrieved from www.integratedreporting.org/wp-content/uploads/2020/02/IR-and-Sustainability-Report-Deloitte-Norway.pdf
Dresner, S. (2002). The Principles of Sustainability. Earthscan Publications, UK.
Elijido-Ten, E. O., & Tjan, Y. (2014). Sustainability Balance Scorecard Disclosures and Corporate Committee to Sustainability: An Australian Study. Journal of Social and Environmental Accounting, 8(4), 185-208.
Elkington, J. (1997) Cannibals with Forks: The Triple Bottom Line of the 21st Century Business. Oxford: Capstone Publishing.
Epstein, M. J., & Roy, M. J. (2001). Sustainability in action:Identifying and measuring key performance drivers. Long Range Planning, 34, 585–604
Ernst & Young, (2015). Investment Rules 2.0: nonfinancial and ESG reporting trends, Global institutional investor survey 2015.
Frederick, W. C. (2006). Corporation, be good! The story of corporate social responsibility. Dog Ear Publishing, LLC
George, H. (2009). Progress and poverty. Cambridge: Cambridge University Press
Global Reporting Initiatives (GRI), (2006). Sustainability reporting standards set to transform business. Amsterdam: GRI
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Gray, R.H. & Bebbington, K.L. (2000). Environmental accoupting, managerialism and sustainability: Is the planet safe in the hands of business and accounting? Advances in Environmental Accounting and Management, 1, 1-44.
Goel, P. (2010). Triple bottom line reporting: An analytical approach for corporate sustainability. Journal of Finance,
Guthrie, J. & Ward, L. (2006). Legitimacy theory: Astory of reporting social and environmental matters within the Australian food and beverages industry. www.ssm.com
Haanaes, K. (2016). Why all businesses should embrace sustainability in business. IMD Business School. https://www.imd.org
Haffar, M., & Searcy, C. (2015). Classification of trade-offs encountered in the practice of corporate sustainability. Journal of Business Ethics, 140(3), 495–522.
Henriques, I., & Sadorsky, P. (1999). The relationship between environmental commitment and management perspection of stakeholders’ importance. Academy of Management Journal, 42 (1), 87 - 99
Hunt, C. B. & Auster, E. R. (1990). Proactive environmental management: Avoiding the toxic trap. Sloan Management Review, 31 (2), 7 - 18
Kolk, A. (2008). “Sustainability, accountability and corporate governance: Exploring multinationals’ reporting practice.” Business Strategy and the Environment 18, 1-15.
KPMG (2002). KPMG international study of corporate sustainability reporting 2002. Amsterdam: Graduate Business School.
KPMG. (2008). KPMG international survey of corporate sustainability reporting. Retrieved from http://us.kpmg.com/RutUS_prod/Document/8/Corporate_Sustainability_Report_US_Final.pdf.
Lozano, R. (2013). Sustainability inter-linkages in reporting vindicated: a study of European companies. Journal of Cleaner Production, 51, 57-65.
McAdam, T. W. (1973). How to put corporate responsibility into practice. Business and Society Review, 6, 8 - 20
Mutalib, H. A., Jamil, C. Z. M., & Hussin, W. N. W. (2014). The availability, extent and quality of sustainability reporting my Malaysian firms: subsequent to mandatory disclosure. asian Journal of Finance and Accounting, 6 (2), 239 – 257.
Mutalib, Y. O. Iriabije, E. U. Okon A. E., & Chijioke, O.E. (2020). Impact of sustainability reporting on corporate performance: Evidence from Nigeria Stock Exchange. Journal of Management and Entrepreneuship, 20 (7), 345 – 367
Nwobu, O. A. (2017), Determinant of corporate sustainability reporting in selected countries in Nigeria. Covenant University.
Ofoegbu, G. N. & Asogwa, C. (2020). The effect of sustainability reporting of profitability of quoted consumer goods manufacturing firms in Nigeria. International Journal of Innovative Research and Development, 9 (4), 271 – 282
Okpala, O.P., & Iredele, O. O. (2018). Corporate social and environmental disclosures and market value of listed firms in Nigeria. Copernican Journal of Finance and Accounting, 7 (3), 9 – 28
Oyewo, B. M., & Isa, R. (2017). Improving corporate sustainability reporting through the adoption of integrated reporting: A study of Nigeria and South Africa firms. African Accounting and Finance Journal, 1 (1) 52 – 94
Oyewumi, O. R., Ogunmeru, O. A., &, Oboh, C. (2018). Investment in corporate social responsibility, disclosure practices, and financial performance off banks in Nigeria. Future Business Journal, 4 (1), 195 – 205.
Roome, N. (1992). Developing environmental management strategies. Business Strategies and Environment. 1 (1), 11 – 24
Security and Exchange Commision , (SEC), (2018). Sustainability disclosure guidelines 1. Retrieved from www.icsr.org
Stead, W. E. & Stead, J. D. (2009). Management for a small planet, 2nd edition, M. E. Sharpe, Armonk, N. Y.
Sulkowski, A.J., & Waddock, S. (2014). Beyond sustainability reporting: Integrated reporting is practiced, required and more would be better. Retrieved from http://ir.stthomas.edu/cgi/viewcontent.cgi?article=1335&context=ustlj
Tenuta, P. (2010). The measurement of sustainability. Review of Business Research, 10 (2), 163–171.
Vander Esch, S., & Steurer, N. (2014). Comparing public and private sustainability monitoring and reporting. PBL Note 1437, Netherlands Environmental AssessmentAgency. Retrieved from: http://pblweb10.prolocation.net/sites/default/files/cms/publicaties/pbl-2014
Zilahy, G & Kovács, L. (2012). Corporate Sustainability Reporting in Hungary – the Special Case of the ICT Sector. In: EMAN-EU 2008 Conference. Sustainability and Corporate Responsibility Accounting – measuring and managing business benefits. Budapest: AULA.
Adams, C. & Zutshi, A. (2004). Corporate social responsibility: Why business should act responsibly and be accountable. Australian Accounting Review, 14(3), 31-39.
Ajape, K. M. (2019). Environmental sustainability disclosure practices and economic performance of selected listed firms in some states in Nigeria (Doctoral dissertation, University of Lagos).
Aifuwa, H. O. (2020). Sustainability reporting and firm performance in developing climes: A review of literature. Copernican Journal of Finance & Accounting. 9 (1), 9 – 29
Ajibolade, S. O. & Uwuigbe, O. (2013). Managerial ownership, audit quality and corporate financial performance in Nigeria. Global Journal of Accounting, 3 (1), 60 – 78
Ajibolade, S. O. & Oyewo, B. (2017). Firm characteristics and performance disclosures in annual reports of Nigerian banks using the balanced scorecard. Euro Economica, 36(1), 94 – 112.
Ameer, R., & Othman, R. (2012). Sustainability Practices and Corporate Financial Performance: A Study Based on the Top Global Corporations. Journal of Business Ethics, 108(1), 61-79.
Bieker, T (2003). Sustainability Management with the Balanced Scorecard. Conference proceedings of 5th International Summer Academy on Technology Studies, pp. 17–34.
Brammer, S., & Pavelin, S. (2006).Voluntary environmental disclosures by large UK companies. Journal of Business Finance and Accounting, 33(7 /8), 1168-1188.
Branco, M., & Rodrigues, L.L. (2007), “Positioning stakeholder theory within the debate on corporate social responsibility”, Electronic Journal of Business Ethics and OrganizationStudies, 12 (1), 5-15.
Brundtland, G. H. (1987). Our common future. United Nations World Commission on environment and development (Brundtland Commission). Oxford: Oxford University Press. ISBN:01928280X
Burlea, S. A., & Popa, I. (2013). Legitimacy theory, in encyclopedia of corporate social responsibility. Spinger-Verlag, Berlin Heidelberg. 1579 - 1584
Buysse, K. & Verbeke, A. (2003). Proactive environmental strategy. A stakeholder management perspective. Strategic Management Journal, 24 (5), 453-470
Buzzelli, D. T. (1993). Time to structure an environmental strategy. Journal of Business Strategy, 12 (2), 17-20
Clarkson, M. (1995). A statkeholder framework for analyzing and evaluation corporate social performance. Academy of Management Review, 20 (1), 92-117
Clarkson, P.M., Li, Y., Richardson, G.D., & Vasvari, F.P. (2008).Revisiting the relation between environmental performance and environmental disclosure: An empirical analysis. Accounting, Organizations andSociety, 33(4-5), 303-327.
Deegan, C. & Gordan, B. (1996). A study of the environmental disclosure practices of Australian corporations. Accounting and Business Research, 26 (3), 187-199.
Deegan, C. (2002). The legitimizing effect of social and environmental disclosures-a theoretical foundation. Accounting, Auditing & Accountability Journal, 15(3), 282-311.
Deloitte, (2019): Greenwashing or measurable results? Sustainability and integrated reporting – An analysis of the 50 largest companies in Norway. Retrieved from www.integratedreporting.org/wp-content/uploads/2020/02/IR-and-Sustainability-Report-Deloitte-Norway.pdf
Dresner, S. (2002). The Principles of Sustainability. Earthscan Publications, UK.
Elijido-Ten, E. O., & Tjan, Y. (2014). Sustainability Balance Scorecard Disclosures and Corporate Committee to Sustainability: An Australian Study. Journal of Social and Environmental Accounting, 8(4), 185-208.
Elkington, J. (1997) Cannibals with Forks: The Triple Bottom Line of the 21st Century Business. Oxford: Capstone Publishing.
Epstein, M. J., & Roy, M. J. (2001). Sustainability in action:Identifying and measuring key performance drivers. Long Range Planning, 34, 585–604
Ernst & Young, (2015). Investment Rules 2.0: nonfinancial and ESG reporting trends, Global institutional investor survey 2015.
Frederick, W. C. (2006). Corporation, be good! The story of corporate social responsibility. Dog Ear Publishing, LLC
George, H. (2009). Progress and poverty. Cambridge: Cambridge University Press
Global Reporting Initiatives (GRI), (2006). Sustainability reporting standards set to transform business. Amsterdam: GRI
Global Reporting Initiatives (GRI), (2016). First global sustainability reporting standards set to transform business. Amsterdam: GRI
Gray, R.H. & Bebbington, K.L. (2000). Environmental accoupting, managerialism and sustainability: Is the planet safe in the hands of business and accounting? Advances in Environmental Accounting and Management, 1, 1-44.
Goel, P. (2010). Triple bottom line reporting: An analytical approach for corporate sustainability. Journal of Finance,
Guthrie, J. & Ward, L. (2006). Legitimacy theory: Astory of reporting social and environmental matters within the Australian food and beverages industry. www.ssm.com
Haanaes, K. (2016). Why all businesses should embrace sustainability in business. IMD Business School. https://www.imd.org
Haffar, M., & Searcy, C. (2015). Classification of trade-offs encountered in the practice of corporate sustainability. Journal of Business Ethics, 140(3), 495–522.
Henriques, I., & Sadorsky, P. (1999). The relationship between environmental commitment and management perspection of stakeholders’ importance. Academy of Management Journal, 42 (1), 87 - 99
Hunt, C. B. & Auster, E. R. (1990). Proactive environmental management: Avoiding the toxic trap. Sloan Management Review, 31 (2), 7 - 18
Kolk, A. (2008). “Sustainability, accountability and corporate governance: Exploring multinationals’ reporting practice.” Business Strategy and the Environment 18, 1-15.
KPMG (2002). KPMG international study of corporate sustainability reporting 2002. Amsterdam: Graduate Business School.
KPMG. (2008). KPMG international survey of corporate sustainability reporting. Retrieved from http://us.kpmg.com/RutUS_prod/Document/8/Corporate_Sustainability_Report_US_Final.pdf.
Lozano, R. (2013). Sustainability inter-linkages in reporting vindicated: a study of European companies. Journal of Cleaner Production, 51, 57-65.
McAdam, T. W. (1973). How to put corporate responsibility into practice. Business and Society Review, 6, 8 - 20
Mutalib, H. A., Jamil, C. Z. M., & Hussin, W. N. W. (2014). The availability, extent and quality of sustainability reporting my Malaysian firms: subsequent to mandatory disclosure. asian Journal of Finance and Accounting, 6 (2), 239 – 257.
Mutalib, Y. O. Iriabije, E. U. Okon A. E., & Chijioke, O.E. (2020). Impact of sustainability reporting on corporate performance: Evidence from Nigeria Stock Exchange. Journal of Management and Entrepreneuship, 20 (7), 345 – 367
Nwobu, O. A. (2017), Determinant of corporate sustainability reporting in selected countries in Nigeria. Covenant University.
Ofoegbu, G. N. & Asogwa, C. (2020). The effect of sustainability reporting of profitability of quoted consumer goods manufacturing firms in Nigeria. International Journal of Innovative Research and Development, 9 (4), 271 – 282
Okpala, O.P., & Iredele, O. O. (2018). Corporate social and environmental disclosures and market value of listed firms in Nigeria. Copernican Journal of Finance and Accounting, 7 (3), 9 – 28
Oyewo, B. M., & Isa, R. (2017). Improving corporate sustainability reporting through the adoption of integrated reporting: A study of Nigeria and South Africa firms. African Accounting and Finance Journal, 1 (1) 52 – 94
Oyewumi, O. R., Ogunmeru, O. A., &, Oboh, C. (2018). Investment in corporate social responsibility, disclosure practices, and financial performance off banks in Nigeria. Future Business Journal, 4 (1), 195 – 205.
Roome, N. (1992). Developing environmental management strategies. Business Strategies and Environment. 1 (1), 11 – 24
Security and Exchange Commision , (SEC), (2018). Sustainability disclosure guidelines 1. Retrieved from www.icsr.org
Stead, W. E. & Stead, J. D. (2009). Management for a small planet, 2nd edition, M. E. Sharpe, Armonk, N. Y.
Sulkowski, A.J., & Waddock, S. (2014). Beyond sustainability reporting: Integrated reporting is practiced, required and more would be better. Retrieved from http://ir.stthomas.edu/cgi/viewcontent.cgi?article=1335&context=ustlj
Tenuta, P. (2010). The measurement of sustainability. Review of Business Research, 10 (2), 163–171.
Vander Esch, S., & Steurer, N. (2014). Comparing public and private sustainability monitoring and reporting. PBL Note 1437, Netherlands Environmental AssessmentAgency. Retrieved from: http://pblweb10.prolocation.net/sites/default/files/cms/publicaties/pbl-2014
Zilahy, G & Kovács, L. (2012). Corporate Sustainability Reporting in Hungary – the Special Case of the ICT Sector. In: EMAN-EU 2008 Conference. Sustainability and Corporate Responsibility Accounting – measuring and managing business benefits. Budapest: AULA.
Published
2022-08-29
How to Cite
ADEBUNMI, O. A., & AJIBOLADE, S. O. (2022). Corporate Commitment to Sustainability Practices among Listed Companies in Nigeria. Global Journal of Accounting, 8(1), 62-74. Retrieved from http://gja.unilag.edu.ng/article/view/1481
Section
Articles
