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

environmental information disclosed in the annual reports of corporations; and found that the disclosure content is restricted and insufficient. The reporting pattern was single sided. The implication of these findings is that firms’ disclosure level is selective to purposively capture only indices that reflect positive results. This assertion was supported by Nguyen& Tran (2019) in Greece &Hughes et al . (2001) posited that the rating of social and environmental responsibility of firms is based on the positivity of their environmental disclosures, and this will force firms to manipulate results to appear responsible. Evidence from these literatures imply that disclosure of environmental activities remains an issue of global discussion as the discussion is moving away from whether a company discloses or not, but rather to full disclosure. The developing countries, including Nigeria, are still peculiar because of lack of statutory enablement. However, the multinational corporations in Nigeria have affiliations with international companies that are situated in countries where environmental accounting disclosures are mandatory and regarded as governance and strategic issues. The moral perception is that these firms will make full disclosure of their environmental related activities as a part of the organizational norm in line with global best business practices and not necessarily responding to domestic regulations. Based on these, it is, therefore, logical to state the hypothesis thus: H o1 : There is no full compliance with environmental disclosure in Nigerian multinational firms c) Environmental Accounting Disclosure and Financial Performance The drive for environmental atmospheric preservation and demand for socially responsible business practices in the event of threatening signals indicated in climate change and global warming have made the study on environmental accounting attractive to scholars globally. Also, the contractual agreement between the managers (agents) of the firms and the providers of capital (owners),according to the agency theory, that focus on maximizing the investments of the owners to increase returns, made the concept of financial performance an accompanying area of discussion in environmental accounting; especially as it relates to disclosure. In a bid to link these variables, several studies have been conducted to determine the association that exists between them, measuring financial performance from various perspectives; and the findings are divergent. In determining the effect of environmental disclosure on profitability, Nahiba (2017); and Makori & Jagongo (2013) conducted studies in India and discovered that environmental accounting disclosure had a significant positive relationship with net profit margin and dividend per share, still a significant negative relationship exists with return on capital employed. In studies conducted in Kenya and Malaysia, Gatimbu & Wabwire (2016) and Al-Tuwaijri (2004) found a significant relationship between environmental accounting and financial performance. In Nigeria, Arumona et al. (2020) using annual reports of 12 oil and gas companies quoted on the floor of the Nigeria Stock Exchange (NSE) for ten years ranging from 2010- 2019,submitted that a positive and significant relationship exists between environmental accounting and financial performance. The same findings were made in studies conducted by various studies when appraising the different sectors of listed companies in Nigeria. These include: Omaliko et al. (2020); Yahaya (2018); Oyedokun et al. (2019); Oyedokun et al. (2019); Ezeagba et al. (2017) ; and Utile (2017). The findings however vary in the researches of Tafadzwa & Fortune (2019); Ezejiofor et al. (2016) and Adeniran & Alade (2013), where they found a negative effect. While Okechukwu et al. (2020) submitted that environmental sustainability disclosure did not have impact on firm performance. Similarly, Saman (2019) researched on the environmental accounting disclosure and financial performance of the oil and gas companies in Nigeria and found no significant relationship between the variables. Also, when Nyirenda et al. (2013) studied environmental management practices and firm performance in South African mining firms, no significant effect was found. Likewise, In Indonesian companies, Sarumpaet (2005) found that there is no significant relationship between environmental performance and financial performance of the companies. The results are also similar in Malaysia, Singapore and Thailand companies as Rahman (2009); and Ponnu &Karthigeyan (2010) in separate studies found that no relationship exists. For studies specifically conducted on return on assets and earnings per share, Gelb (2017),studying environmental disclosures and corporate performance in Japan, found a positive relationship between environmental disclosures and corporate performance when using return on assets as a proxy for financial performance. Okechukwu and Okeke-Muogbo (2020) worked on environmental and social responsibility sustainability disclosure and firm performance of quoted health care and consumer goods companies in Nigeria. They found that environmental sustainability disclosure did not have impact on firm performance. Saman (2019) researched on the environmental accounting disclosure and financial performance of oil and gas companies in Nigeria using 11 companies selected based on environmental information available in the annual reports. The result revealed that the explanatory variables, ROCE, NPM, EPS, and DPS, have an insignificant relationship with environmental accounting © 2021 Global Journals 2 Global Journal of Management and Business Research Volume XXI Issue II Version I Year 2021 ( ) D 20 Environmental Accounting Disclosure and Financial Performance of Listed Multinational Firms in Nigeria