THE IMPACT OF CARBON MANAGEMENT ON WEALTH MAXIMIZATION IN NIGERIA’S FINANCIAL SECTOR

Abstract

This study examines the effect of carbon management strategies on the wealth maximization of listed financial services firms in Nigeria, with the aim of providing insights into how sustainability initiatives contribute to financial performance. Using panel data from eight firms covering the period 2014–2023, sourced from annual financial statements, the analysis focuses on carbon emissions intensity (CEI), renewable energy adoption (REA), and carbon pricing implementation (CPI). Empirical results reveal that CEI (t=49.4452; p<0.05), REA (t=113.837; p<0.05), and CPI (t=71.5513; p<0.05) each exert a significant positive influence on wealth maximization. These findings suggest that reducing carbon intensity, adopting renewable energy, and implementing carbon pricing mechanisms are not only environmentally beneficial but also financially rewarding for financial services firms. The study highlights the strategic importance of integrating carbon management into corporate financial decision-making and recommends policy incentives to encourage sustainable practices within the financial sector. By demonstrating that carbon-conscious strategies enhance both environmental stewardship and shareholder wealth, the research contributes to the growing literature on sustainable finance in emerging economies and offers practical guidance for firms and regulators seeking to balance profitability with long-term sustainability goals.