The Impact of Environmental and Social Governance (ESG) Sustainability Disclosure on Accounting Performance: A Case Study of Firms in Liberia

This research investigates the relationship between sustainability disclosure and accounting performance of companies listed on the Liberian Stock Exchange. The study focuses on the natural resources, industrial goods, and oil and gas sectors, selecting 20 out of 24 firms through stratified sampling. Given Liberia’s strive for economic stability and sustainable development following a prolonged civil conflict, understanding the association between sustainability reporting and Return on Assets (ROA) is crucial. The research aims to provide empirical evidence to guide firms in adopting sustainable practices that drive financial performance. Using secondary data from financial statements, annual reports, and sustainability reports covering 2010-2020, pooled and panel linear regression analyses are conducted. The findings indicate that while environmental and governance disclosure did not significantly impact ROA, social disclosure had a positive effect. These results contribute to our understanding of sustainability reporting’s dimensions that influence firm performance in Liberia. The study offers theoretical and practical contributions, emphasizing the importance of social disclosure practices in enhancing performance and guiding strategic decision-making for firms listed on the Liberian Stock Exchange.