Financial Performance and Environmental Sustainability Reporting Practices of Listed Manufacturing Firms in Nigeria
The pursuit of environmentally responsible companies to provide a balance between corporate objective of profit maximization and the need for environmental sustainability practice has caused the need to examine how financial performance will affect the environmental sustainability reporting practices of quoted manufacturing firms in Nigeria. Specifically, the study assessed how profitability and liquidity status of firms influence their environmental reporting. The study employed Ex-post Facto Research Design and made use of secondary data sourced from annual reports and accounts of sampled firms. A total of 23 firms were selected from 67 manufacturing firms quoted as at December 2018 financial year end using Proportional Sampling Technique. Regression model was used to analyze the data in order to test the hypothesis at 5% level of significance. The result of the analysis showed that profit after tax as proxy for profitability significantly affect environmental sustainability reporting practices of quoted manufacturing firms while earnings per share has a positive relationship but insignificant effect on environmental sustainability reporting. The result for liquidity ratio shows negative and insignificant relationship with environmental sustainability reporting. This study therefore concludes that when considering the influence of financial performance determinants on environmental reporting practices, factors like profitability in terms of profit after tax is significant. It is suggested that the management team of manufacturing firms show more concern about environmental sustainability and its report thereof because firms financial constraints in the area of liquidity and profitability is not a limitation in portraying themselves as environmentally responsible entities.
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