Title: Green Accountig And Firm Performance In Nigeria
Authors: ERHEJUWA EZEKIEL AGHWARETOMA, EHIEDU, Victor C Ph.D
Volume: 9
Issue: 5
Pages: 160-167
Publication Date: 2025/05/28
Abstract:
This study examines the impact of green accounting on firm performance in Nigeria, with a focus on listed firms in environmentally sensitive sectors such as oil and gas, manufacturing, and industrial goods. Green accounting, which integrates environmental costs into traditional financial reporting, is gaining traction globally amid increasing pressure for corporate sustainability. However, its adoption and financial implications in developing economies like Nigeria remain underexplored. The study employs an ex-post facto research design using secondary data from financial statements and environmental disclosures of 30 purposively selected Nigerian firms over a 10-year period (2015-2024). Multiple regression analysis was conducted to assess the relationship between environmental disclosure, sustainability reporting, environmental costs, and firm performance indicators-namely Return on Assets (ROA) and Return on Equity (ROE). Moderating variables such as firm size and industry type were also considered. Findings reveal a significant positive relationship between green accounting practices and firm performance. Environmental disclosure and sustainability reporting enhance financial outcomes, while investment in environmental costs, contrary to traditional belief, contributes positively to profitability. Firm size further strengthens this relationship, though industry type showed marginal influence. The study concludes that green accounting is both a strategic and financially beneficial practice for Nigerian firms. It recommends the institutionalization of mandatory environmental reporting standards, capacity building for firms, and regulatory incentives to encourage adoption. The research contributes to literature by providing empirical insights from an African context and underscores the importance of environmental accountability in corporate financial success.