Climate Risk Reporting and Firm Valuation: Empirical Evidence from Listed Firms on the Nigerian Exchange Group
Abstract
Climate risk has emerged as one of the most consequential macro-financial forces reshaping corporate valuation frameworks globally. Yet, in Sub-Saharan Africa's largest economy, the nexus between voluntary climate risk disclosure and firm value remains empirically underexplored. This study examines the impact of climate risk reporting (CRR) on firm valuation among 148 firms listed on the Nigerian Exchange Group (NGX) over the period 2010–2024. Drawing on a balanced panel dataset of 2,220 firm-year observations, the study employs Tobin's Q and Earnings Per Share (EPS) as proxies for market-based and earnings-based firm valuation, respectively. Climate risk reporting is operationalised using a self-constructed content analysis index adapted from the Task Force on Climate-related Financial Disclosures (TCFD) framework and the Global Reporting Initiative (GRI) standards. The empirical analysis integrates the Fixed Effects (FE) estimator, the Random Effects (RE) estimator, and the System Generalised Method of Moments (SYS-GMM) estimator to address endogeneity, unobserved heterogeneity, and dynamic valuation persistence. Control variables include firm size (FS), firm profitability (FP), growth opportunities (GO), firm age (FA), and liquidity (LIQ). Results reveal that CRR exerts a statistically significant positive effect on Tobin's Q (β = 0.412, p < 0.01) and EPS (β = 0.287, p < 0.05), suggesting that investors and markets in Nigeria reward transparent climate risk communication with higher valuation premiums. These findings are robust to alternative model specifications and sub-sample analyses. The study contributes to the emerging literature on sustainability accounting and climate finance in frontier markets and offers actionable implications for regulators, firm managers, institutional investors, and policymakers pursuing sustainable capital market development in Nigeria and comparable emerging economies.
Fields of Study & Subjects
Corporate Social Responsibility Reporting
Sustainable Finance and Green Bonds
Auditing
Earnings Management
Governance
Publication details
- Journal / source
- Zenodo (CERN European Organization for Nuclear Research)
- Publication date
- 10 February 2026
- Language
- EN