Background of the Study
Corporate Social Responsibility (CSR) refers to the voluntary actions taken by companies to address social, environmental, and ethical concerns beyond the scope of their business operations. CSR disclosures, which are reports published by companies outlining their CSR activities, have become increasingly important in influencing investor decisions. Investors are more inclined to assess a company's CSR performance as part of their investment decision-making process, considering factors such as environmental sustainability, ethical conduct, and contributions to local communities (Fadare & Babalola, 2023).
Seplat Energy Plc, a leading Nigerian oil and gas company, is known for its CSR initiatives, which focus on improving community welfare, environmental conservation, and sustainability. Given Seplat’s role in Nigeria’s energy sector and its CSR activities, this study aims to investigate how CSR disclosures by Seplat Energy impact investor decision-making, particularly in terms of investment attractiveness and market performance (Akanbi & Ogunleye, 2024).
This study examines the relationship between CSR disclosures and investor decisions, focusing on Seplat Energy Plc as a case study, to better understand how investors use CSR information to guide their financial choices.
Statement of the Problem
The role of CSR disclosures in shaping investor decisions is becoming more prominent, yet the exact impact on investor behavior in Nigeria remains underexplored. While Seplat Energy has made significant CSR strides, questions persist on how these disclosures influence investor confidence and whether such reports contribute to enhanced financial performance or market perception (Okeke & Adebayo, 2023). This study aims to address the gap in knowledge about how CSR disclosures affect investor decisions in Nigerian companies, with a particular focus on Seplat Energy.
Objectives of the Study
To examine the effect of CSR disclosures on investor decisions in Seplat Energy Plc.
To assess how investors perceive CSR disclosures in relation to Seplat Energy’s corporate reputation and market performance.
To recommend strategies for improving CSR disclosures to enhance investor confidence and decision-making in Nigerian companies.
Research Questions
How do CSR disclosures influence investor decisions in Seplat Energy Plc?
How do investors perceive the relationship between CSR disclosures and the corporate reputation of Seplat Energy Plc?
What strategies can enhance CSR disclosures to positively impact investor decisions in Nigerian companies?
Research Hypotheses
CSR disclosures do not significantly influence investor decisions in Seplat Energy Plc.
Investors do not significantly associate CSR disclosures with the corporate reputation of Seplat Energy Plc.
Enhanced CSR disclosures do not significantly improve investor confidence and decision-making in Nigerian companies.
Scope and Limitations of the Study
This study focuses on the impact of CSR disclosures on investor decisions concerning Seplat Energy Plc from 2015 to 2024. Limitations include the subjective nature of investor decision-making and the potential lack of detailed CSR data from Seplat Energy’s reports.
Definitions of Terms
Corporate Social Responsibility (CSR): A company’s commitment to contribute to sustainable economic development while improving the quality of life of the workforce, local community, and society at large.
Investor Decisions: The process of determining whether to buy, sell, or hold an investment based on a variety of factors, including financial performance and CSR initiatives.
CSR Disclosures: Publicly available reports or statements made by companies regarding their CSR activities, policies, and performance.
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