SUSTAINABILITY PRACTICES, IMPERATIVE FOR MARKET VALUE OF LISTED FIRMS ON NIGERIAN EXCHANGE GROUP

The market provides an objective valuation basis through the forces of demand and supply of knowledgeable participants. Firms must provide the needed information for these market participant to make informed decisions. Sustainability of firm has not been priced in because of absence of such information and understanding of associated benefits. Therefore, this study investigated the impact of sustainability practices exert on market value of listed firms on the Nigerian Exchange Group. The study adopted ex post facto research design with the use of a static panel data, stratified sampling technique was adopted in selecting 26 firms from the population of 168 firms listed on the Nigeria exchange [as at December 31,2020]. The data was analyzed using multiple regression.Findings revealed that proxies of sustainability practices reacted in various ways to market value of sampled firms. ECSP (P=0.400) and EVSP (P=0.504) have a significant effect on total asset (TA), while SOSP and GOSP insignificantly affect TA (SOSP: p=0.027; GOSP: P=0.028). Considering the coefficients of the explanatory variables; ECSP (α = 2.199); SOSP (α = 0.193); and EVSP (α = 0.551) indicate that ECSP, SOSP, and EVSP positively affect TA while GOSP (α = - 0.141) has negative effect on TA. While firm size provides significant controlling effect on the interactions. Overall, sustainability does exert statistical significant influence on the market value of selected listed firm on the Nigeria exchange. However with the control variable of firm size, this interaction became significant.In conclusion, various dimensions of sustainability practices reacted in various ways to market value of sampled firms, firms’ size has a significant control on this interaction. The study recommended that the management of companies listed on the Nigerian Exchange Group should engage in full sustainability practices vis-à-vis governance, social, environmental and economic sustainability practices to enjoy positive valuation in the market thereby improving market value. The study also recommended that market participants should consider proxies of sustainability in the determination of offer and bid price.