Green Accounting Practices and Investors’ Confidence of Industrial Goods Firm in Nigeria

Nwayen; Aniekan Ime; Mrs Eno G. Ukpong PhD; Prof. Joseph O. Udoayang; Uwem E. Uwah PhD

doi:10.56201/wjfir.v10.no7.2026.pg1.16

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Green Accounting Practices and Investors’ Confidence of Industrial Goods Firm in Nigeria

Nwayen, Aniekan Ime, Mrs Eno G. Ukpong PhD, Prof. Joseph O. Udoayang, Uwem E. Uwah PhD

Abstract

This study examined the effect of green accounting practices on investors’ confidence among listed industrial goods firms in Nigeria. The study was motivated by the increasing importance of environmental sustainability, corporate responsibility, and the need for firms to communicate their environmental activities to investors. Specifically, the study investigated the effect of renewable energy investment costs, environmental regulation compliance costs, and waste recycling disclosures on investors’ confidence, measured by Tobin’s Q. The study adopted an ex-post facto research design and utilized secondary data obtained from the annual reports and financial statements of eleven (11) listed industrial goods firms on the Nigerian Exchange Group for the period 2010–2024. The study generated 165 firm-year observations. Data were analyzed using descriptive statistics, Spearman rank correlation analysis, and hierarchical pooled Ordinary Least Squares regression with the aid of STATA version 17. The descriptive results revealed considerable variations in green accounting practices and market valuation among the sampled firms. The regression results showed that green accounting practices significantly explain variations in investors’ confidence, with the model explaining 37.9% of the changes in Tobin’s Q. The findings revealed that renewable energy investment costs have a positive and significant effect on investors’ confidence, indicating that investors perceive sustainable energy initiatives as value-enhancing investments. Environmental regulation compliance costs were also found to have a positive and significant effect on investors’ confidence, suggesting that regulatory commitment reduces environmental risks and enhances investor perception. Similarly, waste recycling disclosures had a positive and significant effect on investors’ confidence, demonstrating that environmental transparency provides useful signals to investors regarding responsible corporate behaviour. Diagnostic tests confirmed the reliability of the regression model, as no problems of heteroscedasticity, multicollinearity, or significant panel effects were observed. The study concludes that green accounting practices serve as strategic mechanisms for improving corporate reputation, reducing environmental risks, and enhancing market valuation. The study recommends that industrial goods firms should increase investment in renewable energy initiatives, strengthen environmental compliance systems, and improve the quality and consistency of environmental disclosures. Furthermore, firms should adopt internationally recognized sustainability reporting frameworks such as the Global Reporting Initiative to enhance transparency and comparability of environmental information.

Keywords

Green accountinginvestors’ confidencerenewable energy investmentenvironmental compliance costwaste recycling disclosureTobin’s Qindustrial goods.

References

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Green Accounting Practices and Investors’ Confidence of Industrial Goods Firm in Nigeria

Abstract

Keywords

References

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