Submit your papersSubmit Now
For Enquiries: [email protected]
IIARD LogoIIARD

Sustainability Reporting in Nigeria: Trends, Drivers and Challenges

Ngwobia, Ebubechukwu Udo & Onwuka, Onwuka Okwara

Abstract

This study examined the emerging practice of sustainability reporting among Small and Medium Enterprises (SMEs) in Nigeria, with a specific focus on its drivers, trends, challenges, impacts, and future prospects. In light of growing global emphasis on environmental, social, and governance (ESG) performance, sustainability reporting has become a strategic tool for businesses seeking to align with international standards and stakeholder expectations. While sustainability reporting is increasingly adopted by large corporations in Nigeria, its integration among SMEs remains limited, largely due to insufficient awareness, regulatory gaps, inadequate technical capacity, and perceived high costs. The study draws on theoretical underpinnings such as stakeholder theory and legitimacy theory to explore the motivations behind SMEs’ adoption of sustainability practices. A review of recent empirical literature revealed that although SMEs recognize the potential benefits of sustainability reporting including enhanced brand image, increased access to finance, and long-term competitiveness most lack the structure and support to implement it effectively. The findings suggest that simplified reporting frameworks, targeted policy incentives, digital solutions, and stakeholder engagement are critical to improving adoption rates. The study concludes that for Nigerian SMEs to thrive in an increasingly sustainability-conscious economy, there must be a deliberate and collaborative effort among regulators, development partners, and SMEs themselves to integrate sustainability reporting into their operational frameworks.

Keywords

SustainabilityReportingSmall and Medium EnterprisesPerformanceGovernance

References

Adediran, A. I., & Alao, O. A. (2022). Sustainability reporting, green washing, and the future of corporate transparency in Nigeria. International Journal of Corporate Governance, 15(4), 57–71. Adediran, A. O., & Alao, A. A. (2022). Green washing and sustainability reporting in Nigeria: A critical assessment. Environmental and Social Governance Journal, 10(3), 102–115. Adetunji, A. O. (2017). The role of regulatory frameworks in sustainability reporting in Nigeria: A study of listed companies. Journal of Sustainable Business, 18(4), 202–218. Adegbite, E., Nakajima, C., & Amaeshi, K. (2020). Corporate social responsibility and sustainability reporting in Nigeria: Problems, prospects and future directions. Business Ethics: A European Review, 29(1), 55–71. Adekoya, A. F., & Oduyoye, O. O. (2022). Digital transformation and sustainable business practices among Nigerian SMEs. Journal of Sustainable Development in Africa, 24(1), 143–157. Akinyele, S. T. (2010). Corporate social responsibility and sustainability reporting in Nigeria: An overview. Social Responsibility Journal, 6(2), 79–92. Akinyele, S. T. (2020). Corporate social responsibility and sustainability reporting in Nigeria: A critical review. International Journal of Business and Management, 12(3), 45–56. Akinyele, S. T., & Iredele, O. O. (2022). Stakeholder influence and sustainability reporting among Nigerian listed firms. Journal of Accounting and Business Studies, 8(1), 30–44. Akinyele, S. T., & Ofoegbu, G. N. (2018). Sustainability reporting and corporate reputation in Nigeria: Evidence from listed firms. Journal of Business Ethics and Corporate Social Responsibility, 14(2), 33–45. Akinyele, S. T., & Ofoegbu, G. O. (2018). Sustainability reporting and corporate reputation in Nigeria. Journal of Business and Sustainability, 7(1), 25–40. DiMaggio, P. J., & Powell, W. W. (1983). The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. American Sociological Review, 48(2), 147– Egbunike, P. F., & Iwuoha, C. (2016). Institutional pressures and sustainability reporting in Nigeria: An empirical investigation. African Journal of Business Management, 10(10), 195–206. Ezeagba, C. E., John-Akamelu, C. R., & Umeoduagu, C. D. (2017). Environmental accounting disclosures and financial performance: A study of selected food and beverage companies in Nigeria. International Journal of Academic Research in Business and Social Sciences, 7(9), 162–174. https://doi.org/10.6007/IJARBSS/v7-i9/3325 Freeman, R. E. (1984). Strategic management: A stakeholder approach. Boston: Pitman Publishing. Idemudia, U. (2020). Corporate social responsibility and development in Africa: Issues and possibilities. Geoforum, 43(3), 234–246. https://doi.org/10.1016/j.geoforum.2011.08.007 Idowu, S. O., & Papasolomou, I. (2014). Corporate social responsibility and sustainability in Nigeria: An exploratory study. Journal of Corporate Citizenship, 55(3), 68–89. Idowu, S. O., & Papasolomou, I. (2014). Exploring the relationship between corporate social responsibility and sustainability in Nigeria. Social Responsibility Journal, 10(2), 132–145. Iredele, O. O., & Akinyele, S. T. (2021). Corporate governance and sustainability reporting in Nigeria: Evidence from the financial sector. Nigerian Journal of Business Management, 15(2), 88–105. Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs, and ownership structure. Journal of Financial Economics, 3(4), 305–360. Ogunleye, G. A., & Olayiwola, W. K. (2021). Sustainability reporting practices and SME performance in emerging economies: The Nigerian experience. African Journal of Business and Economic Research, 16(1), 173–192. Ogunyemi, O. (2015). Challenges of sustainability reporting in Nigeria: A review of corporate governance issues. Corporate Governance and Sustainability Review, 8(2), 45–59. Ogunyemi, O. (2015). Challenges of sustainability reporting in Nigeria: The role of corporate governance. Nigerian Journal of Business Ethics, 3(2), 80–91. Ogunyemi, O. (2019). Challenges of sustainability reporting in Nigeria: The role of corporate governance. Nigerian Journal of Business Ethics, 3(2), 80–91. Ogunyemi, O. (2019). Corporate governance and sustainability reporting in Nigeria: Challenges and prospects. African Journal of Business Ethics, 8(3), 124–137. Ogunyemi, O. (2019). The role of corporate governance in sustainability reporting in Nigeria. Nigerian Business Review, 12(4), 77–92. Okike, E., Adegbite, E., & Idowu, S. O. (2021). Regulatory influences on corporate social and environmental reporting in Nigeria. Journal of Business Ethics, 174(3), 517–535. Okoye, L. A. (2012). Corporate governance and sustainability reporting in Nigeria: A relationship analysis. African Journal of Business Ethics, 6(1), 34–47. Okoye, L. E. (2012). Sustainability reporting and corporate governance in Nigeria. Journal of Corporate Governance and Sustainability, 6(1), 12–21. Okoye, L. E. (2018). Sustainability reporting and corporate governance in Nigeria. Journal of Corporate Governance and Sustainability, 6(1), 12–21. Okoye, L. U., Evbuomwan, G. O., & Mgbodile, C. C. (2021). Corporate sustainability practices among SMEs in Nigeria: The moderating role of institutional support. Nigerian Journal of Management Sciences, 10(2), 56–68. Onyali, C., & Okafor, B. (2023). Global standards and the evolution of sustainability reporting in Nigeria: A review of practices and challenges. African Journal of Business Ethics, 17(1), 12–29. Securities and Exchange Commission (SEC). (2018). Nigerian code of corporate governance Abuja: SEC. Suchman, M. C. (1995). Managing legitimacy: Strategic and institutional approaches. Academy of Management Review, 20(3), 571–610. Uwuigbe, U., Uwuigbe, O. R., & Olayemi, A. (2019). Sustainability reporting and firm performance: A study of selected quoted companies in Nigeria. Social Responsibility Journal, 15(8), 1100–1112. https://doi.org/10.1108/SRJ-01-2018-0012 Uwuigbe, U., Uwuigbe, O. R., Oladipo, O. A., & Jimoh, J. (2020). Corporate sustainability reporting and market value of listed firms in Nigeria. Corporate Governance: The International Journal of Business in Society, 20(4), 607–621. https://doi.org/10.1108/CG- 07-2019-0215 Uwuigbe, U., Uwuigbe, O. R., & Olayinka, A. I. (2022). Integrated reporting and sustainability practices in Nigeria: An emerging trend. International Journal of Sustainable Development, 11(2), 45–61.

More Articles from JOURNAL OF BUSINESS AND AFRICAN ECONOMY

Monetary Policy Transmission Mechanism and Economic Growth in the West African Monetary Zone, 2000-2025

Author: i, Okolie, Romanus Onyeisi, ii, Emeter Patrick Okechukwu, iii, Aduba Paul Nnamdi, iv, Eneaniofu Daniel Mmaduakonam, v, Okwor Emmanuel Ejimnkonye

Inventory Management and Organisational Performance of Selected Manufacturing Firms in Southwest, Nigeria

Author: Akande, Folashade Adebisi, Ibojo, Bolanle O. PhD, Akinruwa, Temitope E. PhD

Monetary Policy and Performance of Deposit Money Banks in Nigeria

Author: Egbuho, Chika Anthonia, Njoku, Kevin Chinaka. Isukul, Araniyar. Chinedu.