Effect of Environmental Cost Disclosure on Earnings Per Share of Listed Manufacturing Firms in Nigeria

Abstract

The study investigated the effect of environmental cost disclosure on the financial performance of 12 listed manufacturing firms in Nigeria from 2013 to 2022. Expost facto research design was adopted and secondary data were sourced from their annual reports of the sampled manufacturing firms listed on the Nigerian Exchange Group as at 31st December, 2022. Results on the assessment of the effect of independent variables (Pollution control cost (PCC), Waste management cost (WMC) and Employee health and safety cost (EHSC) on dependent variable (Earnings per share (EPS) were analyzed with the use of the statistics, correlation analysis, Panel Generalized Method of Moments as well as Arellono-Bond Serial Correlation test. The outcome of the analysis revealed that Pollution control cost effect on earnings per share of listed manufacturing firms in Nigeria is negative but significant. However, the effect of Waste management cost and Employee health and safety cost on earnings per share of listed manufacturing firms in Nigeria is positive and significant. The study concluded that environmental cost disclosure has significant effect on the financial performance of listed manufacturing firms in Nigeria. The study recommended that Manufacturing firms should invest in environmental training, donations and charity, waste management and remain socially responsible to the host communities to ensure smooth and uninterrupted operations.