Does Environmental Disclosure Matter to Financial Performance of Quoted Industrial Goods Companies in Nigeria? An Empirical Assessment

Abstract

This study sought to ascertain whether environmental disclosure matters to performance of quoted industrial goods companies in Nigeria or not. Panel data were collected from the annual reports and accounts of 12 industrial goods companies for a period of 10 years (from 2013 to 2022) and analyzed using multiple regressions. Results indicated that environmental disclosure significantly and negatively affects performance using Tobin’s Q. On the other hand, it insignificantly and positively affected ROE. It is therefore, concluded that, environmental disclosure is a major determinant of financial performance based on Tobin’s Q but not a major determinant of financial performance based on ROE. The study recommended among other things that, the implementation of environmental disclosure in organizations should be encouraged by managers, for this would enable them identify products with greater environmental costs to the organization; and these could become useful measures of departmental performance evaluation and product profitability assessment, which in the long run might improve companies’ financial performance.