Dimensional Effect of Sustainability Reporting on Financial Performance: Evidence From Quoted Pharmaceutical Firms in Nigeria

This study examined the dimensional effect of sustainability reporting on the financial performance of quoted pharmaceutical companies in Nigeria from 2013 to 2025. Sustainability reporting was disaggregated into environmental, social, and economic dimensions, while financial performance was measured using Return on Capital Employed, Return on Assets, and Gross Profit Margin. A quantitative research design was adopted using ex-post facto data obtained from the annual reports of 65 firm-year observations. Data were analyzed using descriptive statistics, Pearson correlation, and simple linear regression in SPSS. Results show that Environmental Sustainability Reporting had a significant negative effect on Return on Capital Employed (β = -.267, p = .032) but a significant positive correlation with Gross Profit Margin (r = .323, p = .009). Social Sustainability Disclosure had no significant effect on Return on Assets (β = -.014, p = .914). Economic Sustainability Disclosure had a significant positive effect on Gross Profit Margin (β = .248, p = .046). The explanatory power of the models was low, with R² values ranging from .000 to .071. The study concludes that the effect of sustainability reporting on financial performance is dimension-specific. Economic sustainability practices improve short-term profitability, environmental practices create a short-term trade-off between margins and capital efficiency, and social practices show no significant financial effect in the short run. The study recommends that firms, regulators, and investors should evaluate sustainability disclosures dimensionally rather than as a single construct.