Role of Institutional Factors and Environmental Policy in Improving Corporate Sustainability Initiatives in Nigerian Listed Non-Financial Firms

As a result of low attention given towards corporate sustainability initiatives (CSI) which encompass economic, environmental, social, and governance aspects by companies to their host communities, this study examines the relationship between institutional factors such as economic constraints, and competition, and environmental policy towards CSI, as well as firm specific attributes such as company size and leverage on the Nigerian non-financial listed firms. Data were collected from the firms assessed and documented by global consensus rate of corporate social responsibility (CSRHUB) from 2018 to 2023. A total of 300 firm-year observations were considered using the annual reports and accounts of 50 sampled companies. The panel-corrected standard errors (PCSEs) and fixed generalised lease square (GLS) regression models were used to test the hypotheses for this study. The result established that economic constraints measured by access to finance is not significantly related to CSI. In contrast, competition and environmental policy are positive and significantly associated with CSI. Likewise, company size and leverage indicate a positive relationship with CSI. Hence, this study suggests that regulatory authorities should assess how the companies deal with issues relating economic constraints to ensure a good access to finance that could be responsible for sustainability initiative practices among non-financial firms in Nigeria.