Corporate Social Responsibility Disclosure and Profitability: Experience from Selected Consumer Goods Manufacturing Firms in Nigeria

Abstract

Corporate Social Responsibility (CSR) is increasingly recognized as a vital element of business operations, especially in the manufacturing sector. In Nigeria, with its challenges of poverty, illiteracy, poor infrastructure, and environmental degradation, there is an urgent need for businesses to contribute to addressing societal issues. This study evaluates how CSR is strategically integrated into business operations, with a focus on environmental and social considerations. An ex post facto research design were employed, data was gathered from the audited annual financial reports of five consumer goods manufacturing firms listed on the Nigerian Exchange Group, covering the period from 2020 to 2024. A purposive sampling technique was employed to select firms with readily accessible financial reports. Descriptive and inferential statistics were used to analyze the data, with panel regression analysis assessing the impact of external and internal environmental costs on return on assets (ROA), and Pearson Product Moment Correlation (PPMC) evaluating the relationship between these environmental costs and equity. The findings revealed a significant relationship between environmental costs and profitability, with external environmental costs negatively impacting profitability, while internal environmental costs had a positive correlation. it was concluded that CSR disclosure positively and negatively correlated to the profitability of manufacturing firms in Nigeria. It recommends that firms adopt strategies to mitigate external environmental costs, such as improving operational efficiencies or passing costs onto consumers, to enhance profitability