Environmental Reporting and Financial Performance of Listed Industrial and Consumer Goods Firms in Nigeria

Abstract

This study examines the effect of environmental reporting on financial performance of listed Nigerian industrial and consumer goods firms for the period of ten (10) years from 2012 to 2021. The population of the study comprises forty-two (42) listed industrial and consumer goods firms in Nigeria. Eleven (11) firms were selected as the study sample size, which comprises 5 industrial goods and 6 consumer goods firms. The remaining 31 firms were filtered out, because they did not report their environmental disclosure throughout the period of this study and some were delisted. Return on Asset (ROA) is considered as proxy of financial performance. Secondary data were used and extracted from the firm’s annual reports using environmental reporting Index (ISO 14031) content analysis, provided at appendix A1. In relation to financial performance the data was also collected from the firm’s annual reports. The study analyses were conducted using STATA 13 statistical software. The regression result revealed that environmental information has significant positive effect on return on asset (ROA); employee health and safety have negative significant effect on ROA; product safety has negative significant effect on ROA. Based on these findings, this study therefore, concludes that environmental reporting influence financial performance of listed industrial and consumer goods firms in Nigeria. This study therefore, recommends among others that, listed Nigerian industrial and consumer goods firms should emphasize more on reporting their environmental issues as it is capable of improving their financial performance.