Authors
Abstract
Background: Sustainability disclosure has become an important governance and accountability tool for firms operating in stakeholder sensitive markets, particularly within Sub Saharan Africa where environmental risk exposure, legitimacy pressure, and regulatory monitoring are intensifying. Despite rising adoption of ESG based sustainability reporting, evidence remains mixed on whether disclosure improves firm performance or functions mainly as symbolic compliance.
Aim: This study assessed the effect of sustainability disclosure on firm performance in Sub Saharan Africa, while examining the moderating role of board gender diversity in strengthening the disclosure performance relationship.
Methodology: The study adopted an ex post facto research design using panel data obtained from annual reports and sustainability reports of sampled listed non financial firms in Sub Saharan Africa. The population comprised 132 listed non financial firms across Nigeria, Ghana, South Africa, and Kenya, out of which 84 firms were selected based on data availability. The study covered twelve years from 2013 to 2024. Data were analysed using descriptive statistics, correlation analysis, fixed effects panel regression, and robust regression for sensitivity checks.
Findings: Sustainability disclosure exhibited a positive and statistically significant relationship with return on assets and Tobin’s Q, indicating that greater transparency in environmental and social reporting is associated with improved profitability and market valuation. Board gender diversity significantly strengthened the sustainability disclosure performance relationship. Sustainability disclosure showed a negative but insignificant association with return on equity, implying that increased disclosure may not immediately translate into higher equity returns.
Contributions: The study contributes to governance and sustainability reporting literature by providing cross country evidence from Sub Saharan Africa, where sustainability reporting is expanding but constrained by weak enforcement and inconsistent assurance frameworks.
Recommendations
Regulators: Harmonise sustainability disclosure guidance, promote industry specific ESG templates, and encourage independent sustainability assurance.
Stakeholders: Improve sustainability literacy among investors, analysts, and communities to reduce misinterpretation of ESG performance.
Researchers: Extend analysis by sector, incorporate climate risk metrics, and explore the mediating role of sustainability assurance and audit committee sustainability competence.