SOCIAL SUSTAINABILITY REPORTING AND MARKET VALUE OF LISTED MANUFACTURING COMPANIES IN NIGERIA.

Abstract
This study investigated the effect of social sustainability reporting on the market value of listed manufacturing companies in Nigeria. It used an ex-post facto research design and data was collected from the annual reports and accounts of 65 manufacturing companies listed on the NSE for a period of five (5) years from 2015-2019. Social sustainability reporting was divided into 6 variables: Employment (EMP), Occupational Health and Safety (OHS), Training and Education (TE), Diversity and Opportunity (DO), Community Commitment (CC) and Customer Health and Safety (CHS). Tobin’s Quotient (TQ) was used as a dependent variable to represent market value. Multiple regression analysis was used to analyse the data. Findings reveal that EMP has a significant positive effect on TQ, OHS, TE and DO have insignificant positive effect on TQ while CC and CHS have negative significant effect on TQ. It was recommended that manufacturing companies should as a matter of policy continue to encourage the society by carrying out societal projects that can better the lives of the citizens as well as that of their customers. They should also continue with their employment policy as this is also shown to be a relevant factor stakeholders’ commit in the project of continuing improvement and innovativeness.
Key Words: Social Sustainability Reporting, Market Value, Tobin’s Quotient, Manufacturing Companies, NSE
Introduction
The issue of sustainability reporting has gathered momentum since the establishment of world organizations such as the Global Reporting Initiative (GRI), sustainability Integrated Guidelines for Management (SIGMA) Project, World Business Council for Sustainable Development (WBCSD), International Standards Organisation (ISO) and the Council for Social and Ethical Accountability (AA!000). These bodies together provide the fundamental principles upon which sustainability reporting activities are disclosed to diverse number of stakeholders. When such reports are disclosed, the reporting entity is expected to gain large market share, improved customer and employee relations, increased sales volume, gain competitive advantage, improved environmental management practices and technologies including cost reduction, supplier ties, reduction of liabilities, quality improvements, efficiency, more productive work force and reducing business risk (Senge, 2002; Hart 2005). These benefits when derived can motivate a company’s manager to sustainably disclose all activities that can enhance the sustainability of its environment.
There are three dimensions of sustainability as provided by the sustainable development goals which sets the pace for sustainability reporting. These dimensions are the environmental aspect, the social aspect and the economic aspect. This study concentrates on the social aspect of sustainability reporting. This is because the social reporting sustainability entails the provision of benefits that cut across various social contracts entered into by the company and its stakeholders that are directly related to the welfare of the parties. Social reporting issues such as employment, community commitments, occupational health and safety, training and education, diversity and opportunity, customer health and safety, industrial and labour relation as well as human rights protection are germane to the society and so are closely linked to the factors that can motivate and encourage companies to engage in the social responsibility activities and consequently, social reporting.
Companies that are not seriously taking their sustainability reporting as a whole and social reporting in particular are said to be striving towards social, economic and environmental unsustainability ((Unerman, Bebbington & O’Dwyer, 2007). This unsustainability behavior of companies may have social implications for both the company and the stakeholders (both internal and external), the consequences of which may lead to labour strike and industrial disharmony, litigations between the company and the host community, threats to corporate survival, increased risks and supplier cuts. This could in a way affect the overall performance of the company and consequently its market value. Studies have been conducted to ascertain whether or not there is an association between such reports and corporate value. Such studies include Hategan, Sirghi, Curea-Pitorac and Hategan (2018), Sopian and Mulya (2018), Nnamani, Onyekwelu and Ugwu (2017), Hirigoyen and Poulain-Rehm (2015), Solomon and Linda (2002) and Servaes and Tamayo (2013). These studies were conducted in different countries with different institutional and regulatory frameworks that resulted in multiplicity of diverse results about the effect of social reporting on company value or performance as a whole. It is the interest of this study to explore the way and manner social sustainability reporting can affect company value of listed manufacturing companies in Nigeria. The choice of manufacturing companies is based on their ability to cause serious environmental and social challenges on the host community and the environment in general through air and water pollution, food poisoning, desertification, climate change leading to global warming, food shortage, and reduction of human immune system due to poisoning of food, air and water. This calls for an investigation into the activities of manufacturing concerns that are detrimental to the society as a whole.