Environmental Accounting Disclosure and Financial Performance of Listed Manufacturing Firms in Nigeria
A Panel Data Analysis (2018–2023)
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Abstract
The corporate manufacturing industry is one of the top contributors to pollution, waste production and carbon emissions in Nigeria, and disclosure of environmental impacts is largely voluntary, irregular and inadequately regulated. In light of this background, this study examines the relationship between environmental accounting disclosure and financial performance of 25 listed manufacturing companies in Nigeria for the period 2018 – 2023. The Environmental Disclosure Index (EDI), Environmental Cost Disclosure (ECD) and Sustainability Reporting Practices (SRP) are analyzed for three performance dimensions, namely Return on Assets (ROA), Return on Equity (ROE) and Earnings per Share (EPS). The study uses a balanced panel of 150 firm-year observations, with stationarity confirmed through the Levin–Lin–Chu panel unit root test and the choice of estimator determined by the Hausman specification test. The findings indicate that EDI makes a positive and statistically significant contribution to ROA and ROE; and SRP makes a significant and positive contribution to ROE and EPS. ECD is consistently positive across all three dependent variables although is not statistically significant, due to the multi-year horizontal time lag between the recognition of environmental costs and realisation of environmental performance. Stability of the core results is ensured through robustness checks in pooled OLS. The general finding was that environmental accountability and sustainability disclosure are value-enhancing strategic processes of the Nigerian manufacturing sector and that performance benefits are largely realised via reputational, equity and capital market channels.
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Copyright (c) 2026 Rapheal Olufemi Ajayi, Okafor Mercy, Akwasi Acheampong, Jeremiah Yusuf, Victor Olalekan Kolapo, Emmanuel Oluwatimileyin Kolapo (Author)
This work is licensed under a Creative Commons Attribution 4.0 International License.
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