Environmental Disclosures and Firms Value: An Empirical Evidence on Nigerian Firms

Abstract

This study investigated the relationship between environmental disclosures and firm value in Nigeria. The independent variable for the study was proxied using waste management disclosure (WMD), pollution control disclosure (PCD), environmental remediation disclosure (ERD) and environmental research and development disclosure (ERDD) while the dependent variable was proxied by net assets per share (NAPS). Four research questions and hypotheses were formulated for this study. Ex Post Facto design was used and data for the study were obtained from the Nigerian Exchange Group (NGX) Factbook and published annual financial reports and accounts of 52 firms listed under oil and gas sector, consumer goods sector, industrial goods sector, ICT sector, health care sector and conglomerate sector of Nigerian Exchange Group (NGX) with data spanning from 2017-2022 period. Using panel regression model, the study that waste management disclosure, pollution control disclosure, environmental found remediation disclosure and environmental research and development disclosure have positive and significant influence on firm value proxied as net assets per share at 1-5% level of significance. Based on this, the study concludes that environmental disclosures determine firm value in Nigeria. In lieu of the findings of the study, it was recommended that government agencies should encourage corporate organizations to comply with environmental laws regarding their environmental activities as this will encourage environmental reporting by them. Also, corporate organizations should ensure that they comply with the environmental laws and also disclose more of such information in relation to balancing the effect of continuing business operations in a particular environ as such disclosures ensures firms value.

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