MODERATING EFFECT OF OWNERSHIP CONCENTRATION ON ENVIRONMENTAL SUSTAINABILITY REPORTING AND FIRM VALUE OF LISTED SERVICE COMPANIES IN NIGERIA

Abstract

Given the growing global emphasis on sustainability, firms are increasingly required to disclose their
environmental performance. The study examined the moderating effect of ownership concentration on
the relationship between environmental sustainability reporting and firm value among listed service
companies in Nigeria. The study employed an ex-post facto research design. Using a panel data
approach and the Generalized Method of Moments (GMM), the study analyzes data from 220 firm-year
observations. The findings reveal that environmental sustainability reporting (ENV) has a significant
positive effect on firm value (FV), indicating that firms engaging in sustainability disclosures experience
increased investor confidence and financial performance. Ownership concentration (OWNCO), however,
exhibits a significant negative moderating effect, suggesting that in firms where ownership is highly
concentrated, dominant shareholders may prioritize short-term financial gains over long-term
sustainability investments. The study concluded that, there is need for stronger regulatory frameworks to
enforce sustainability reporting and corporate governance reforms that mitigate the entrenchment effects
of controlling shareholders. The study recommends that regulatory bodies such as the Financial
Reporting Council of Nigeria (FRCN) and the Securities and Exchange Commission (SEC) should
enforce mandatory sustainability reporting guidelines aligned with global frameworks such as the Global
Reporting Initiative (GRI) and the International Financial Reporting Standards (IFRS). This would
enhance the credibility of sustainability disclosures and ensure comparability across firms