CARBON EMISSION ACTION DISCLOSURE AND SUSTAINABILITY REPORTING QUALITY OF MANUFACTURING FIRMS IN NIGERIA

Abstract

Sustainability reporting quality among listed firms in developing countries remains inconsistent, with variations in the completeness, comparability, reliability and relevance of sustainability information disclosed to stakeholders. In Nigeria, although listed manufacturing firms increasingly provide sustainability-related information, the quality and usefulness of such disclosures remain a concern, particularly regarding carbon emission reduction targets, carbon governance structures and external carbon assurance. This raises questions about whether specific dimensions of carbon emission action disclosure are associated with the quality of sustainability reporting among listed manufacturing firms in Nigeria. This study investigates the effect of carbon emission action disclosure on sustainability reporting quality among listed manufacturing firms in Nigeria with focus on carbon emission reduction targets (CERT), carbon governance structure (CGOV) and external carbon assurance (ECAS).The study used ex-post facto research design. Data for the study were obtained from secondary sources through annual reports and sustainability reports of selected listed firms for the period 2015 to 2024. The population comprises 59 listed manufacturing firms, from which a sample of 46 firms was selected using purposive sampling technique.  The study employs panel data techniques, including pooled OLS, fixed effects and random effects models. Findings show that CERT (β = 0.536, p < 0.01), CGOV (β = 0.2447, p < 0.01), and ECAS (β = 0.3539, p <0.01) have positive and significant effects on sustainability reporting quality. The study concludes that action oriented carbon disclosure practices improve the quality and credibility of sustainability reporting among listed manufacturing firms in Nigeria. It is recommended that firms should focus more on projection of clear carbon emission reduction targets, strengthen governance structures for climate oversight, and adopt independent third party assurance for carbon disclosures in order to promote transparency and credibility of sustainability reporting quality.