IOSR Journal of Economics and Finance (IOSR-JEF) e-ISSN: 2321-5933, p-ISSN: 2321-5925. Volume 12, Issue 3 Ser. II (May –June 2021), PP 45-53 www.iosrjournals.org DOI: 10.9790/5933-1203024553 www.iosrjournals.org 45 | Page Effect of Sustainability Reporting On Financial Performance of Listed Manfactring Firms in Nigeria From 2015-2020 Dr Awa Felix N. Department of Accountancy Ebonyi State University, Abakaliki, Nigeria. Abstract The study examined the effect of sustainability reporting on the financial performance of manufacturing firms in Nigeria from 20115-2020. This was to ascertain the effect of community relations disclosure, employee relations disclosure, board composition disclosure, and environmental disclosure on the return of Assets of these firms. Data used were sourced from annual reports of the selected manufacturing firms and were analyzed using panel least square regression technique based on the fixed effect of the regression model. The findings showed that community relation disclosures and employee relation s disclosures have negative and significant effect on the return on assets, while board composition and environmental disclosures have positive and significant effect on return on assets of selected manufacturing firms in Nigeria. It was concluded that sustainable reporting components of community relation, environmental reporting, and employee relation as well as board composition had mix effects on the performance of manufacturing firms. It was recommended that managers of these firms should incorporate sustainable reporting and ensure effective disclosure reporting into their financial statements. Keywords: Sustainable Reporting, Financial Performance, Board Composition Environmental Disclosure. --------------------------------------------------------------------------------------------------------------------------------------- Date of Submission: 08-05-2021 Date of Acceptance: 23-05-2021 --------------------------------------------------------------------------------------------------------------------------------------- I. Introduction Manufacturing firms are currently obliged to increase their reporting standards to include both performance indicators and social efforts to positively impact the environment in which they operate (Murray 2010) Sustainability reporting is an improvement of the traditional way of financial reporting. This integral part of financial reporting has three parts which are economic, environmental and social report disclosure which measures the ability of an organization to meet its obligations to the society. (krkac, 2007). These dimensions of sustainability reporting includes and are measured in terms of return on assets, board composition, community relations, employee relations customers and society, research and development, waste management, political connections and external assurance are the core issues in sustainability reporting. Consequently, sustainability accounting as a reporting style is fast gathering momentum most especially with the adoption of International Financial Reporting Standard (IFRS) which compels through and full disclosure of firms’ monetary and non monetary activities. Firm performance measures how efficient and effective a firm is, its dealings. In accounting firm financial performance measures the profitability of firms in terms of return on assets, return on investment and return on equity. It also measures market value such as earring par share, price earrings ration among others. The relationship between sustainable reporting in legitimacy and financial performance is deeply rooted in legitimacy theory of Dowling and pfeffer (1975).Khavel, Nikhasemi, Haque and Yousefi (2012) posited that sustainable reporting is germane to achieve organization strategies of profit maximization, product diversification and differentiation through assessment of the firm’s impact on its environment and on dif ferent stakeholders such as employees and the community. Therefore, sustainable reporting reflects the phenomenon of balancing the interests of different stakeholders and in meeting their needs while eliminating potential negative effects on the environment and on the society at large. Consequently, financial reporting of firms is not only viewed on the basis of financial performance indicators but also on the basis of environmental and social performance indicators which gives rise to the need to expand the existing model of external financial reporting. Over the years, managers have began to perceive corporate sustainability as a necessesity, which has been redefined to be the way businesses interpret and create value.(Berthon, Abood and Lay 2010; Ludems, Laszlo and Lynch 2012). This development has been driven and encouraged by the higher expectations and requirements from various stakeholders concerning the level o transparency of the corporations’ operational activities. (Fischer and Sawezyn, 2013) The implication of this is