SUSTAINABILITY REPORTING AND EARNING CAPACITY OF TIER ONE BANKS IN NIGERIA
SUSTAINABILITY REPORTING AND EARNING CAPACITY OF TIER ONE BANKS IN NIGERIA

Summary/Abstract: In this study, the effect of sustainability reporting on earning capacity of tier one banks in Nigeria was investigated using panel data from 2010 to 2023. The study covered all five tier one banks in Nigeria. Independent variables include Economic sustainability reporting, Environmental sustainability reporting and social sustainability reporting. While earning capacity proxy by Return on Equity was employed as the dependent variable. Descriptive statistics, correlation matrix and random effect model (REM) regression were employed in analyzing the data. The study found that Economic sustainability reporting has a positive and significant effect on earning capacity (Return on Equity) of quoted tier one banks in Nigeria: Environmental sustainability reporting has a positive but not significant effect on earning capacity (Return on Equity) of tier one banks in Nigeria. Social sustainability reporting has a positive and significant effect on earning capacity (Return on Equity) of tier one banks in Nigeria. The study recommends amongst others that Tier one banks should improve on their economical sustainability activities because it gives insight to the existing and potential stakeholders that the companies are doing well in raising the stock value of the company, which is good for investment and new investors hence, it will increase the company earning capacity based on statistical evidence. Also, stakeholders should not solely consider environmental sustainability reporting in analyzing the earning capacity of tier one banks for business investment because the result shows that there is no statistical evidence between environmental sustainability and earning capacity of tier one banks, based on the statistical result that shows that environmental sustainability reporting has a positive but insignificant effect on earning capacity.

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