Investigating Social Sustainability Factors Influencing the Performance of Firms Listed at Nairobi Securities Exchange, Kenya

Abstract

Social sustainability factors are recognised as critical drivers of firm performance in Kenya. However, most studies focus on specific industries, limiting a broader understanding of social sustainability factors on performance. Therefore, this study sought to investigate social sustainability factors influencing the performance of firms listed at Nairobi Securities Exchange, Kenya. This study adopted a positivist research philosophy, descriptive and explanatory research design. The target population was 350 heads of selected departments in the firms listed at the Nairobi Securities Exchange from which a sample size of 187 respondents was selected using stratified random sampling. The study utilised both primary and secondary data. Primary data was collected by use of a questionnaire, while secondary data was collected using a checklist. Drop-off and pick-up-later method was used in the collection of data. Quantitative data were analysed using descriptive statistics and inferential statistics. An average mean score of 3.75 (SD = 1.01) indicates that firms practice labour standards, diversity and inclusion, human rights, community engagement, and employee health and safety. Nagelkerke Pseudo R² revealed that social factors explained 58.3% of the variance in firm performance (R² = .583). The parameter estimates further showed that social sustainability factors significantly predicted firm performance (β = 2.290, p ≤ .05). The study contributes to the growing body of knowledge on the relationship between social sustainability and firm performance in Kenya. Managers of NSE-listed firms should prioritise social sustainability initiatives as strategic drivers of organisational performance and competitive advantage.