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ABSTRACT
Traditional accounting or financial reporting is a form of accounting that is considered to be narrow and only concerned about the financial performance and financial position of a company when there are far more expansive measure of business sustainability. The failure of traditional accounting to account for how their activities affect the environment in which the business operates and the sustainability of the society became more obvious in recent years, hence, the reason for this study. This study seeks to examine the influence of business activities on the environment, the sustainability of the society and governance. The study employed panel data extracted from the annual financial statements of the sampled firms. Various statistical test (unit root test and multicolinearity through Pearson correlation matrix) preceding the conduction of Random Panel Effect Regression Analysis. The result revealed that in relation to Return on Equity (ROA) as a proxy for manufacturing firms’ economic performance, environmental practices has a significant effect on economic performance while social practices and corporate governance practices have an insignificant relationship with manufacturing firms’ economic performance. Furthermore, in relation to MPS, the analysis revealed that environmental practices have an insignificant relationship with manufacturing firms’ economic performance while social practices and corporate governance practices have a significant relationship with manufacturing firms’ economic performance. Finally, in relation to manufacturing firms’ market value (TobinsQ), the analysis revealed that environmental and corporate governance practices have a positive and an insignificant effect on manufacturing firms’ economic performance (TobinsQ) in Nigeria, while social practices have a negative and significant relationship with manufacturing firms’ economic performance (TobinsQ) in Nigeria. Therefore, we conclude that ESG is an important component and determinant of manufacturing firms’ economic performance in Nigeria within the time frame of the study.
