Drivers of Sustainability Accounting and Reporting in Emerging Economies: Evidence from Nigeria

Stakeholders’ demand for companies to provide social, economic and environmental reports is increasingly becoming a fundamental requirement for companies. This paper investigates the factors that drive the choice of sustainability reporting in an emerging market economy context, with reference to Nigeria. Using data sourced from 3 different reports (annual accounts, sustainability reports and websites) of the top 50 large companies listed in the Nigeria Stock Exchange for the period 2015–2020 and a fixed effect panel regression model, our study makes three important findings. First, the study provides evidence that sustainability reporting is mostly influenced by the following company internal factors: size, profitability, ownership structure, listing age, leverage and auditor type. Second, the findings indicate that that size of firms, profitability and companies audited by Big-4 audit firms has a significant positive relationship with sustainability reporting in Nigeria. In contrast, ownership structure and the leverage position of firms affect sustainability reporting negatively. Finally, our study shows that the banking and oil and gas sectors take sustainability reporting more seriously than any other sectors in Nigeria. Contextualizing the findings within accountability and transparency, we provide evidence on the drivers and the relationship between the various drivers and sustainability reporting in Nigeria. This has implications for policymakers, future researchers and contributes to the literature of sustainability reporting in Nigeria. Even though this study used Nigerian data, it will increase pressure on firms in other developing countries to assess the context-specific determinants of sustainability reporting.