Analysis of Sustainable Investment Strategies on Emerging Financial Markets in Nigeria

This study examined the impact of sustainable investment strategies on emerging financial markets in Nigeria, with specific focus on the stock market. The study is motivated by the growing global emphasis on sustainability and the limited empirical evidence on how sustainability-oriented investments influence financial market development in emerging economies. Annual time series data covering the period from 1994 to 2025 were sourced from the Central Bank of Nigeria Statistical Bulletin and the OECD Climate Finance Database. Stock market capitalization was used as a proxy for emerging financial market performance, while sustainable investment strategies were captured through investment in climate financing, renewable energy measured by the percentage of electricity generated from renewable sources, and agribusiness investment. The study employed descriptive statistics and Ordinary Least Squares regression techniques to analyse the data. The findings reveal that investment in agribusinesses and renewable energy has positive and statistically significant effects on stock market capitalization, indicating that these forms of sustainable investment enhance market performance. Investment in climate financing shows a statistically significant but negative relationship with stock market performance, suggesting inefficiencies in the transmission of climate related funds to capital market activities. The study concludes that sustainable investment strategies have differential effects on Nigeria’s emerging financial market and recommends policies that strengthen the integration of sustainability driven investments into the stock market framework to enhance long term market development.