Environmental, Social, and Governance (ESG) Costs andMarket Performance of The Listed Agricultural Firms in Emerging Markets

Abstract

The rise in the global sustainability movement has also made ESG elements more important in ‎corporate management, especially in developing nations such as Nigeria. In this research, the ‎authors attempted to examine how the costs of ESG impact the market performance of listed agricultural ‎corporations in Nigeria. This study assessed the effects of expenditure on environmental, social ‎, and governance on market performance. This paper employed a post facto research design. It ‎centered the attention on all 5 agricultural companies that were listed on the Nigerian Exchange ‎Group (NGX) up to December 31, 2023, where the information on them was gathered based on ‎annual reports, ESG disclosures, and financial databases between the period of 2010 through ‎‎2023. A census sampling method was applied to make it as representative as possible. The result ‎of the regression-based analysis showed that social costs have a positive and significant ‎relationship with the market performance of the Nigerian agricultural firms. It was also shown that ‎market performance was negatively and significantly influenced by environmental costs as well ‎as governance costs. These results showed that ESG investments boost company performance ‎and improve investor perception, and there is a need to use more focused and coordinated ‎sustainability spending. In line with the results of the emerging findings, this research paper ‎considers that companies ought to make some eco-friendly initiatives to become an intrinsic part ‎of their operation as a strategy to ensure that such initiatives contribute to their sustainable ‎and a monetary gain‎.