Environmental Accounting Disclosure and Financial Performance of Listed Multinational Firms in Nigeria

Abstract

The study investigated environmental accounting disclosure and financial performance of listed multinational companies in Nigeria. This study was conducted by firstly assessing the level of compliance, and then exploring the effect of environmental disclosure on financial performance with a focus on multinational companies in the face of continued environmental abuse witnessed in the Nigerian business space owing to the non-availability of sustainability reporting legal framework. The study used secondary data obtained from the published annual reports of the companies from 2011 to 2020. Data collected (Environmental disclosure index, return on asset, earnings per share), were analyzed using descriptive statistics and panel regression analysis. It was discovered that in assessing level of compliance, out of the three sectors assessed, oil and gas was the least compliant. Also, results showed that environmental accounting disclosure had a significant and positive effect on earnings per share (EAPS) but a negative and insignificant effect on return on asset (RETA). The study, therefore, concluded that the extent of responsiveness of companies to environmental accounting disclosure influences how the company is valued.The study, therefore, recommended that multinational companies and other Nigerian firms, should make effort to disclose their environmental-related activities even though it is not required by law, as it has shown evidence of its influence on earnings on shares of companies.

Relationship of Environmental Disclosure of Renewable Energy, Carbon Emissions, Waste Management, Water Consumption, and Banks’ Financial Performance

“…However, FIRS had a negative but insignificant effect on ROA. These findings are consistent with previous studies such as Tomomewo et al (2022), Igbekoyi et al (2021), and Nejla and Haithom (2022), which also found no significant relationship between ES reporting and FP in DMBs and firms. On the other hand, these findings contradict the conclusions of other studies conducted by Olakunle (2015), ABM, Ruzlin and Jeaneth (2021), Zamil and Hassan (2019) and Atanda et al (2021), which suggested that ES practices have a significant impact, both positive and negative, on the FP of SMEs, financial institutions, banks, and firms.…”

“…On the other hand, these findings contradict the conclusions of other studies conducted by Olakunle (2015), ABM, Ruzlin and Jeaneth (2021), Zamil and Hassan (2019) and Atanda et al (2021), which suggested that ES practices have a significant impact, both positive and negative, on the FP of SMEs, financial institutions, banks, and firms. In this study, it is argued that ES is more of an ethical practice rather than a resourcebased practice for DMBs, and therefore does not necessarily affect their FP (Igbekoyi et al, 2021). Overall, the findings of this study are consistent with stakeholder theory, legitimacy theory, and agency theory, supporting a positive relationship between ES practices and the FP of the quoted DMBs in Nigeria though it is insignificant.…”

International Financial Reporting Standards [IFRS] and Corporate Governance: A Survey of Nigerian Deposit Money Banks [DMBs]

“…IFRSs implementation is vital to a sound financial regulatory framework and corporate governance (Okoye & Ofoegbu, 2006). Financial reporting is a crucial element necessary for corporate governance to function effectively (Igbekoyi & Agbaje, 2018). IFRSs implementation is geared at improving transparency and disclosure of items in the financial statements.…”

Impact of various structural attributes on B2B sustainability positioning

“…Organizations today are becoming increasingly aware of environmental concerns, owing to which their leaders are trying to incorporate environmental factors into their strategic planning and decision-making (Elkington, 1997). Some studies have shown that being aware of environmental issues can mitigate information asymmetry and improve the quality of sustainability reports, which leads to a good brand image (Igbekoyi and Olaleye, 2020). The literature also highlights that concern for the environment could be linked to B2B sustainability positioning (Kapitan et al, 2019).…”