Global Journal of Management and Business Research, D: Accounting and Auditing, Volume 21 Issue 2

Environmental Accounting Disclosure and Financial Performance of Listed Multinational Firms in Nigeria Keywords: environmental disclosure index, earnings per share, multinational firms, nigeria and return on asset. I. I ntroduction he current change in information needs of stakeholders and the move to respond to enlarged profit horizon in the business world have led most corporations to social, ecological, and humanitarian issues (Ntim, 2016). The resultant effects of the activities of these corporations negatively affect the social and ecological well-being of the society. The impression of the adverse effect of business activities on the stakeholders has necessitated the clamour for more information disclosure requirements in conformity with global best business practices (Ndlovu & Dzomira, 2021). Author α ρ Ѡ ¥ : Adekunle Ajasin University,Akungba-Akoko, Ondo State, Nigeria. e-mail : olusola.igbekoyi@aaua.edu.ng Author σ : Federal University, Oye-Ekiti, Ekiti State, Nigeria. Oladimeji and Folayan (2018) stated that the increasing impact of industrialization and business expansion in all public and private organizations through a new channels of enhanced product quality and innovations have brought about economic development in Nigeria, still it is, however practicable that this positive impact will not come without a cost. The manufacturing sector have highly impacted the Nigerian economy in recent time, especially in the advent of corona virus 2019 pandemic, where the significance of innovation in production methods for the survival of the economy is redefined. The societal cost of this expansion redefinition is the injection of hazardous component to the ecological and societal environment. A proactive action is should be taken to ensure that the environment is preserved while encouraging the manufacturing sector to grow in line with global demand. Studies have been submitted on the significance of environmental disclosures on financial performance in Nigeria and other developed countries. Ezeagba, et al. (2017) stated it had a significant relationship with financial performance, in the sense that it ensured greater return and a competitive edge in the global market. This finding was supported in similar studies conducted by Arumona et al. (2020); Igbekoyi (2017); Omaliko et al. (2020); among others. Okechukwu and Okeke-Muogbo (2020) however studied the health care sector and revealed that a negative relationship exists between environmental disclosure and firm performance. Although the submissions of previous studies are divergent, the studies that upheld the significant positive effect of environmental accounting disclosure on financial performance are on the high side. Despite the increased rate of discussions and submission of existing studies on the subject matter, the incidences of environmental abuse are still persistent; these environmental abuses have led to degradation of the environment and defacement of the green nature of the land space. Environmental accounting disclosure still falls under the voluntary information disclosure component of the financial reports of listed firms in Nigeria. This loophole has made companies continue to hide under the existing laws to shy away from disclosing T 17 Global Journal of Management and Business Research Volume XXI Issue II Version I Year 2021 ( ) D © 2021 Global Journals Olusola Esther Igbekoyi (PhD) α , Festus Taiwo Solanke σ , Sunday Amos ADEUSI (PhD) ρ , Muyiwa Ezekiel Alade (PhD) Ѡ & Wale Henry Agbaje (PhD) ¥ 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.