Ownership Structure and Climate-Related Financial Disclosures – Evidence From Listed Firms in Nigeria

Abstract

There has been a growing recognition of possible negative impact of climate on investments. Investors generally are now demanding for climate related financial disclosures as part of general purpose financial reporting, useful for investment decision making. However, it is argued that this depends on the investment appetite and ownership structure of the companies in question. This study examines effect of ownership structure on climate-related financial disclosure of listed non-financial firms in Nigeria. The study measures ownership structures with institutional, managerial, foreign and ownership concentration as independent variables, while climate related financial disclosures are measured by the extent of disclosures on environment in line Global Reporting Initiative (GRI) guidelines. The study adopted ex-post facto research design relying on secondary data obtained from annual financial statements of the population for the period 2013 – 2022. The population of this study comprised of 116 non-financial firms listed on the Nigeria Exchange Group (NGX) as at 31st December 2022 and using Tero Yamane’s sampling method, the study arrived at sample size of 51 firms. According to the results of random effect regression of multiple regression, institutional ownership and foreign ownership are statistically significant to the extent of climate related disclosures of listed non-financial firms in Nigeria. Based on the findings, the study concluded that institutional ownership and foreign ownership can effectively enhance the climate related financial disclosures of firms. Hence,it is recommended that Government and relevant regulatory agencies should consider a review of ownership structure of listed firms in Nigeria to cater for diverse interests of various stakeholder groups.