ENVIRONMENTAL INVESTMENT DISCLOSURES AND FINANCIAL PERFORMANCE OF LISTED INDUSTRIAL GOODS FIRMS IN NIGERIA

Abstract

The negative effects of globalization and rapid growth of industries on environment have changed the business paradigm from profit issues to profit, people and planet. This study examined the effect of environmental investment disclosure on financial performance of listed industrial goods firms in Nigeria. The specific objectives includes; to examine the effect of air protection disclosures on return of assets of listed manufacturing firms in Nigeria; to ascertain the effect of water protection disclosures on return of assets of listed manufacturing firms in Nigeria and to determine the effect of land protection disclosures on return of assets of listed manufacturing firms in Nigeria. The study used ex-post facto research design with 6 sample size from 2018-2022. Findings revealed that; there is a negative and significant relationship between air protection disclosures and the performance of industrial goods companies in Nigeria; there is a positive impact of water protection disclosures on the performance of industrial goods companies in Nigeria and the result of the analysis showed a beta coefficient of 0.072 for land protection disclosure. This implies that 7.2% of the variation in financial performance in the industrial goods companies is accounted for by land protection disclosures. Based on the findings of the study, it was concluded that the effect of environmental investment disclosure on financial performance of the industrial goods companies in Nigeria is significant. Based on the findings of the study, the following recommendations were made; the management of the industrial goods companies should disclose their water protection activities in their financial statement. This will boast the confidence of all stakeholders in the industrial goods sector; the amount of disclosures on the land protection activities of the firms should be increased as this will increase the financial performance of the selected industrial goods firms and the companies should put in place adequate cost control mechanism to ensure air protection cost does not significantly deplete the financial performance of the industrial goods firms in Nigeria.

Keywords: Environmental investment, Financial performance.