Social and Environmental Impact on Financial Performance of Selected Listed Cement Manufacturing Firms in Nigeria

Abstract

The question of the balance between corporate sustainability initiatives and profitability has been widely discussed. The problems facing today's managers were how to manage performance across sustainable dimensions so that the synergistic advantages of its execution approach may be derived. Conflicts between companies and their host communities arise because companies fail to comply with their duties to society.Hence, the study aim examines social and environmental impact on financial performance of selected listed manufacturing firms in Nigeria.The study adopted ex-post factoresearch design. The study looks at social and environmental impact on the financial performance of listed cement manufacturing firms in Nigeria for period from 2011 to 2020. The variables for the study are community relations, research and development and return on capital employed. Three (3) cement companies were used namely BUA cement plc, Dangote cement plc and Lafarge cement plc.Findings reveal that environmental disclosure especially R&D disclosures has a significant effect on firm financial performance as these items show-up in the fixed effects regression with statistically significant p-values. Likewise, findings reveal that social disclosure especially Community relations disclosure has an insignificant effect on firm financial performance.  The study concluded ha environmental disclosure impact firm financial performance in a significant way while social disclosure does not. It is therefore recommended that shareholders and the government should ensure compliance with environmental regulations, especially in the area of environmental disclosures as this helps the firms to be conscious of the environment where it belongs.