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Esg Considerations And Capital Structure Of Listed Deposit Money Banks In Nigeria

Author

Listed:
  • Philip Olawale Odewole

    (Department of Accounting and Finance, Elizade University, Ilara-Mokin, Nigeria)

  • Rebecca Oluwakemi Adesanya

    (Department of Accounting and Finance, Elizade University, Ilara-Mokin, Nigeria)

  • Florence Modeupe Fapohunda

    (Department of Accounting and Finance, Elizade University, Ilara-Mokin, Nigeria)

Abstract

Environmental, Social, and Governance (ESG) considerations are reshaping corporate finance globally; however, evidence from emerging markets remains limited. This study examined the bi-directional relationship between ESG considerations and capital structure among listed deposit money banks in Nigeria, employing longitudinal data from 2015 to 2024 for eight purposively selected banks. Panel two-stage least squares was employed to address endogeneity, with ESG disclosure measured using content analysis adapted from the Nigeria Exchange Group’s sustainability guidelines, and capital structure proxied by the debt-to-equity ratio. Findings revealed that ESG disclosure does not significantly influence capital structure, nor does capital structure predict ESG disclosure, indicating no bi-directional relationship. This study concluded that capital markets and investors in listed deposit money banks in Nigeria may not yet fully incorporate ESG considerations into financing decisions. It recommends that banks should integrate ESG into risk and funding strategies, while regulators should incentivize linking ESG quality to capital access.

Suggested Citation

  • Philip Olawale Odewole & Rebecca Oluwakemi Adesanya & Florence Modeupe Fapohunda, 2025. "Esg Considerations And Capital Structure Of Listed Deposit Money Banks In Nigeria," Economics and Management, Faculty of Economics, SOUTH-WEST UNIVERSITY "NEOFIT RILSKI", BLAGOEVGRAD, vol. 22(2), pages 12-31.
    • Handle: RePEc:neo:journl:v:22:y:2025:i:2:p:12-31
    DOI: 10.37708/em.swu.v22i2.2
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    Keywords

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    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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