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

environmental related information. In the case of multinational companies in Nigeria, apart from doing business in Nigeria, they have affiliation with companies and stock exchange markets in developed countries, so they the obligation by law of those countries to prepare sustainability reports that captures their economic, social, and environmental activities in a given period. But unfortunately, the case is different as most environmental information disclosed had poor outcomes (Adegbei & Nwobodo, 2020). This argument is evident in the increasing cases of environmental abuse, with some of these multinational companies caught in the web. Although some of these multinational companies prepare sustainability reports and disclose environmental information, the question is whether there is full compliance with environmental information disclosure as stated in the environmental reporting index. There is a need, therefore, to conduct an appraisal of the level of compliance of multinational firms in Nigeria, especially those whose activities affect the ecological environment. This study, is therefore, firstly conducted an intra-sector appraisal of the extent of compliance of multinational firms in Nigeria to environmental accounting disclosure in line with global best practices and then investigated the effect of these environmental disclosures on the financial performance of the firms. This study will give a clue into the quality of environmental information disclosed, which will give a hint on why there are still cases of environmental degradation despite claims of environmental disclosure by Nigerian firms. It may also form a roadmap for developing of a regulatory frame work for environmental accounting disclosure in Nigeria in the future. Apart from the introductory part of this study discussed, there are other four sections; which captures the review of related literature in the second, the third section discusses the methods, and the analysis of data and interpretation of results featured in the fourth section at the same time, conclusion and recommendations are stated in the fifth section which is the concluding section. II. L iterature R eview and H ypotheses D evelopment Environmental accounting is defined as the process of providing information regarding the environmental and social costs, which may include environmental conservation and preservation costs as a way of social responsibility to stakeholders (Makori & Jagongo, 2013). Muhammed (2018) broadly define environmental accounting as a term that covers the financial and non-financial information regarding the environmental and ecological impact of company activities on humanity and resultant reactions to their impacts. Wozuru and Micah (2018) also described environmental accounting as the costing of the energy component of an organization activity and the efforts of preserving the environment and producing environmentally friendly products. Environmental accounting disclosure depicts the act of reporting the environmental accounting information to stakeholders as a form of responsibility of adhering to the assumptions of environmental principles (Solomon, 2020; Alok et al., 2018). The ideology of environmental accounting disclosure is not a function of an organization’s ideal but a report of stewardship in the public interest (Vanda, Burgwal & Viera, 2014). However, attempts have been made to redefine environmental accounting disclosure from various dimensions and conceptual perspectives. This study however observes the concept from the perspective of the laid down indicators that are used to evaluate the environmental responsibility level of firms. The environmental disclosure index developed by the global reporting initiative (GRI) has been gradually accepted as a form of environmental disclosure yardstick and it has got global acceptance. This study therefore captures the environmental disclosure indices as stated in the report as adopted in a similar study conducted by Galani et al. (2017) in Greece. This study purposively selected environmental disclosure indices peculiar to the Nigerian ecological system to capture the unique environmental degradation issues to determine the extent of responsibility of companies to stakeholders in the form of full disclosure of these actives. The disclosure items covered in this study are itemized in the measurement of variables in the methodology section of this paper. Financial performance measures the achievement of firms using various criteria. Solomon (2020) stated that financial performance can be measured through profitability and issued shares capital for the year. Arumona et al. (2020) however stated that return on asset and earnings per share are symbols of firms’ improvement and as such, serve as an approach of assessing firms’ performance for a specific period. This study assessed the firms’ performance using return on assets and earnings per share.Arumon a et.al . (2020) described return on assets as a ratio that measures assets and turnover for a particular period. A higher return on assets is advantageous to firms, as it can be used as bait to attract investors to subscribe to their shares. The earnings per share is measured by dividing total profit after tax by total issued shares capital for a year. The choice of these performance yardsticks attempts to appraise the firms from the internal and external perspectives of their performance. This attempt is done by appraising the ratio of profits to the total assets and the issued share; at the same time the former considers that internal assessment of the extent © 2021 Global Journals 2 Global Journal of Management and Business Research Volume XXI Issue II Version I Year 2021 ( ) D 18 Environmental Accounting Disclosure and Financial Performance of Listed Multinational Firms in Nigeria