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

of return, the latter evaluates that performance at the market. a) Theoretical Underpinning This study is hinged on the combination of three theories. The study combined the assumptions of the sustainability, stakeholder and agency theories. The sustainability theory developed by Edward Barbier in 1987 hinges on the prioritization of the responsibility of firms to the atmospheric environment, such that the environment will be maintained in a way that will lead to preservation of its green state into the unforeseeable future. The stakeholder theory developed by Edward Freeman in 1984 is borne from the perspective of business operations carried on, bearing in mind the impact of the company’s activities on individuals and groups that may be affected by their actions and inactions (Freeman, 1984, Walsh, 2005). The main argument of the theory is that firms should perform their business operations so that the value of all stakeholders will be created and not only the shareholders. From the perspective of agency theory developed by Jensen & Meckling (1976), it is theorized that a business operation is likened to a principal-agent relationship; where the agent has a fiduciary duty to the principal, who are the shareholders of the company. The fiduciary duty as assumed in the theory as a duty of trust to work on behalf of the principal for profit and wealth maximization. The underpinning theories are relevant to this study because environmental accounting disclosure is a responsibility to the society and the ecosystem, especially in Nigeria where there is no existing regulation that enforces environmental disclosure. Evidence from existing literature has, however shown that although environmental disclosure is voluntary; it has shown significance in determining firm performance. The agency theory captures the financial performance aspect of this study. This study attempted to assess financial performance from the returns on invested assets and share appreciation in terms of earnings per share owned by shareholders. The theoretical link of this study is corroborated in studies conducted by Mahoney et al . (2007) and Tuwaijiri et al. (2004) in separate studies where they posited that there is a significant association between environmental performance and economic performance especially when there is more quantitative disclosure. b) Environmental Accounting Disclosure in Nigeria Although various studies have explored the effects of environmental accounting disclosure on financial performance, and the majority showed positive results. There is a need, however to investigate the extent of environmental disclosure of these firms, especially in the case of Nigeria and developing countries where these disclosures are voluntary. Norha et al. (2015) investigated environmental disclosure and financial performance among the top 100 companies in Malaysia for the year 2011. The result showed mixed results regarding environmental disclosure practices in Malaysia. The study submitted that there are still ongoing debates regarding the disclosure levels because of the increasing rate of environmental abuse and the major moderating factor is the fact that there is no statutory requirement for companies in Malaysia to disclose their environmental sustainability activities. The result is not different in a study conducted by Eliyash et al. (2013) in Arab doing a comparative study of the environmental disclosure practices of national and international oil and gas corporations the country. It was found that despite a slight increase in the disclosure level, the variations are still significant. The Nigerian case is not different, as evident in the findings of existing studies. Uwuigbe & Jimoh (2012) studied corporate environmental disclosure in manufacturing firms in Nigeria; and discovered that the level of disclosure is still in the embryonic stage as most of the disclosures were still voluntary. Oba and Fodio (2012) also supported this finding in a study conducted to compare oil and gas and construction companies. It was found that the disclosure level was generally small, but the oil and gas companies’ disclosure was still more. Musa et al. (2015) conducted an x-ray on environmental accounting practices in Nigeria and found that the disclosures were not uniform which is majorly owing to lack of regulatory framework. In a recent study conducted by Adegbei & Nwobodo (2020), in the banking sector, the disclosure is said to be significant but still had poor outcomes. In developed countries, studies have attempted to investigate the extent of environmental accounting disclosure in some developed countries. Mitchell et al. (2006) conducted a study to examine the environmental disclosure level of firms in Australia using content analysis and discovered that firms disclosed, but all disclosures were positive. Similarly, a study conducted by Cowan & Gadenne (2005) and Tilt (2001) in the same country, it revealed a positive environmental disclosure level. In China, Ane (2012) assessed the quality of 19 Global Journal of Management and Business Research Volume XXI Issue II Version I Year 2021 ( ) D © 2021 Global Journals Environmental Accounting Disclosure and Financial Performance of Listed Multinational Firms in Nigeria The link of these theories to this study can be deduced from their assumptions. The focal points of the theories include; the environment, society and the shareholders. This study attempted to show the link between how firms account for their social and environmental activities while sustaining the core objectives of their owners. These theories have been applied in varying studies such as; sustainability reporting, corporate social responsibility, and audit and internal control. But the attempt to link these three models exposes the ability of companies to maintain all aspects of their performance evaluation without compromise.