International Journal of Trend in Scientific Research and Development (IJTSRD)

Volume 5 Issue 5, July-August 2021 Available Online: www.ijtsrd.com e-ISSN: 2456 – 6470

Environmental Cost Disclosure and Corporate Performance

of Quoted Foods and Beverages Firms in Nigeria
Egbunike, Patrick A.; Odumodu, Mary Theresa C.
Department Of Accountancy, Nnamdi Azikiwe University, Awka, Nigeria

ABSTRACT How to cite this paper: Egbunike,

This study determined the effect of Environmental Cost Disclosure Patrick A. | Odumodu, Mary Theresa C.
and Performance of Quoted foods and beverages firms in Nigeria. Ex "Environmental Cost Disclosure and
post facto research design and content analysis was adapted for the Corporate Performance of Quoted Foods
study. Sample size of nine (9) Foods and Beverage firms were used and Beverages
Firms in Nigeria"
from twelve (12) Foods and Beverage firms. Data for the study were
Published in
collected from the audited accounts of the sampled Food and International Journal
Beverage firms in Nigeria from 2010 to 2019. Formulated hypotheses of Trend in
were tested using multiple linear regression analysis with the aid of Scientific Research
E-view 9.0. Environmental restoration cost and environmental and Development IJTSRD44971
pollution control cost has no significant effect on firm’s return on (ijtsrd), ISSN: 2456-
assets. Therefore, recommended that the implementation of greener 6470, Volume-5 | Issue-5, August 2021,
technique, that is, environmental restoration enhanced mark-up to pp.897-908, URL:
protect the environment and increased firms’ return on assets. www.ijtsrd.com/papers/ijtsrd44971.pdf

KEYWORDS: Environmental Cost Disclosure, Performance, and Copyright © 2021 by author (s) and
Return on assets International Journal of Trend in
Scientific Research and Development
Journal. This is an
Open Access article
distributed under the
terms of the Creative Commons
Attribution License (CC BY 4.0)
(http://creativecommons.org/licenses/by/4.0)

INTRODUCTION
Earth environment is a rich heritage handed over to us management to environmental costs to enhance a
by previous generations. The present civilization has firm’s long-run financial performance by developing
involved us in varied activities. Many of these processes and products that simultaneously improve
activities generated waste with potential constituents. competitive and environmental performance.
The ultimate disposal of the waste lead to
In Nigeria for instance, one sector of the economy
environmental pollution in many parts of the world,
that has attracted a lot of public outcry on issues
the magnitude of pollution of the environment has
relating to environmental is the manufacturing sector.
already reached an alarming level (Pramanil, Shiland
Though a major source of revenue to the Nigerian
Das, 2007). During the fifties and sixties of the 9th
State (e.g. the oil and gas industries), their activities
century people all over the world become more
are often associated with severe health implications
concerned about the quality of their environment.
and environmental degradation which in recent past
Dimowo (2010) observed that companies like
have caused nagging social disputes and disruption of
conglomerate firms in pursuit of profits can do great
some multinational companies economic activities
social harm and the environment suffers, thus, there is
(Uwaoma & Ordu, 2016). The concerns are being
an emphasis for a meeting point between corporate
heightened due to stakeholders and host community’s
objective of profit maximization and the need for
increased awareness of environmental degradation
environmental management. In this regard, the need
issues such as air and water pollution from heavy
for environmental cost has become the concern and
industrial machines, lack of clean-fresh water, lack of
focus of nations and responsible corporate
sea foods due to oil spill, and the likes. The need for
managements (Okoye & Ngwakwe, 2004).
sustainable environmental cost management in the
Environmental Management Systems (EMS) have
manufacturing industries has thus become the concern
emerged as a means to systematically apply business

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and focus of most nations and responsible corporate prior studies are dominantly prescriptive, often
managements the world over. Organizations are now focusing on one specific ECD tool or managerial
expected to be able to demonstrate that they are aware aspect of the organization. Accounting is now facing
and addressing the impact of their operations on the the challenge to account for the environment not only
environment and society in general (Uwuigbe & through its traditional role of recording and reporting
Jimoh, 2012). financial information, but also through its role to
manage environmental performance.
Environmental Cost Disclosure (ECD) systems have
the dual purpose of managing and improving the Being a subset of environmental accounting,
financial and environmental performance of an entity. Environmental Cost Disclosure (ECD) is regarded as
Application of ECD, which integrates two of the main an extension of conventional cost accounting, and it is
principles of sustainable development – the focus of this research. Bye and large, for the
environmental and economics, can help to purpose of this study, ECD is seen as the generation,
significantly improve corporate decision-making analysis and use of monetary and physical (or
(UNDSD, 2003). Burritt, Hahu, Schaltergger (2001), financial and non-financial) environment related
affirmed that ECD can generate information about the information in order to improve organizational
use of resources with environmentally related impacts financial and environmental performance
and affects the financial position and performance of (Bartolomeo et al. 2000). In addition to social
organization. pressure, accounting, especially environmental costs
are critically important to form this environmental
Government programmes and policies can play an
awareness. In the 1970s, environmental accounting
important role in encouraging and motivating
has gained increasing significance, particularly in
businesses to adopt ECD systems as an integral part
Western countries. The Environmental Accounting
of a firm’s management accounting practices, such
research has focused on “Sustainable Development”
that all project costs (including social and
and aimed to provide balance between economy and
environmental costs) become clearly articulated, fully
ecology (Lazol, Muğal &Yücel, 2008).
inventoried and properly allocated over the life on an
investment (UNDESA; 2001). The fact that Most of the studies that examined the relationship
environmental costs are not fully recorded often leads between environmental management and firm
to distorted calculations for improvement options. performance, some reprted a negative relationship
Studies on environmental accounting over the past between environmental management and firm
years have shed light on the lack of information performance, While Okoye and Ezejiofor (2013);
reaching top management (Rappaport and Maclean, Nwaiwu and Oluka (2018); Mohamed (2018);
1998) and therefore environmental costs often goes Mayangsari (2018); Okafor (2018); and Onyali,
unrealized by corporate decision makers. Okafor and Egolum (2014) that better environmental
performance positively impact business value of an
Consequential effect on corporate organizations may
organization even though that environmental
result in incurring future capital expenditure and cash
disclosure practices of firms in Nigeria is still ad hoc
flows which may impinge on going concern as
Going further, several reasons could be attributed to
balance sheet secured loans may not be secured after
these observed inconsistencies in prior studies. A look
all it land values for instance are affected by
at the previous studies particularly those by Nigerian
environmental factors. Also, the limited awareness of
authors shows a large domination of samples
environmental costing principles and methodology
comprising only of a single sub-sector with the most
has become an important issue to be addressed
current data being that of 2014 (Nnamani, Onyekwelu
(Bassey, Oba & Onyah, 2013).
& Ugwu, 2017). The findings of these studies were
Thus, some companies have started to develop uncertain, besides few research of this nature focused
integrated and complete management accounting on those costs incurred by these entities in
systems, specifically taking into account the maintaining their environment where they operate as
environmental impacts of their activities. well, the extent firm’s reports on environmental
Environmental management accounting allows for a issues in order to effect on their performance. Against
better integration of the environmental information the backdrop, there is need to establish the extent
into the existing accounting systems. firm’s disclosure environmental issues in their audited
As it explicitly treats environmental costs and tracks reports and account was limited in Nigeria.
environmental information, ECD --highlights hidden The main objective of this study is to determine the
environmental costs and benefits (Jasch 2003). effect of environmental cost disclosure on
Nevertheless, little is known about ECD since the performance of quoted foods and beverages firm in

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Nigeria. Specifically, the objectives of the study are processes (Shane, 2005). It is complementary to the
to; conversional financial management accounting
1. Determine the extent to which environmental approach, with the aim to develop appropriate
restoration costs affect performance of quoted mechanisms that assist in the identification and
foods and beverages firms in Nigeria. allocation of environment-related costs (Bennett &
2. Ascertain the extent to which pollution control James, 1998). The major areas for ECD application
costs affect performance of quoted foods and include; in the assessment of annual environmental
beverages firms in Nigeria. costs/expenditures, product pricing, budgeting,
investment appraisal, calculating costs, and savings of
Review of Related Literature
environmental projects, or setting quantified
Environmental Cost Disclosure (ECD)
performance target. Besides being a tool for reporting
Environmental costs consist of environmental
environmental costs to external stakeholders, the
measures and environmental losses. They include
ECD has an internal company-level function and
cleanup costs, costs of recycling materials or
focus (Jasch, 2003; Lange & Alferi, 2004).
conserving energy, closure costs, capital expenditure
and development expenditure. These costs are ECD is as wide-ranging in its scope, techniques and
incurred in preventing, reducing or repairing damage focus as normal management accounting. Burritt,
to the environment and conserving resources. Hahn and Schaltegger (2001) stated: ‘there is still no
However, environmental losses are costs, which bring precision in the terminology associated with ECD.
no benefits to the business. These include fines, They viewed ECD as being an application of
penalties, compensation, and disposal losses relating conventional accounting that is concerned with the
to assets which have to be scrapped or abandoned environmentally-induced impacts of companies,
because they damage the environment (Wright & measured in monetary units, and company-related
Noe, 2006). Accounting for environmental costs impacts on environmental systems, expressed in
though, the issues of environmental and social physical units. ECD can be viewed as a part of the
reporting are not explicitly provided for in the environmental accounting frame work and is defined
companies and allied matters act, has been catered for as ‘using monetary and physical information for
by both local and international standards like ISAR, internal management use (ACCA, 2007). ECD
Global reporting Index (GR). Corporate performance encompasses environmental reporting which is the
is no longer seen simply as being equivalent to and disclosure of information in the published annual
consequently measurable in terms of profitability report or elsewhere, of the effect that operations of
alone. Information on the accounting for the business have on the natural environment.
environmental costs is now required. Each types of Setthasakko (2010) documented that environmental
cost are to be considered as it arises so as to accord it management accounting is “a business tool that
the appropriate treatment in line with Generally provides essential data for corporate environmental
Accepted Accounting Principles (GAAP5) (Nwaiwu management ranging from simple to comprehensive
& Oluka, 2018). methods that link physical and monetary information
Information generated through ECD can either be in for decision making”. Environmental accounting is an
monetary or physical terms. Correspondingly, the inclusive field of accounting and covers all areas of
United Nations Division for Sustainable Development accounting that may be affected by organizational
(UNDSD, 2001) states that: The general use of ECD responses to the environment-related issues.
information is for internal organizational calculations According to Gray and Bebbington (2001),
and decision making. ECD procedures for internal environmental accounting includes: Accounting for
decision making includes both physical procedures contingent environmental liabilities/risks. Accounting
for material and energy consumption, flows and final for asset re-valuations and capital projections as they
disposal, and monetized procedures for costs, savings relate to the environment Cost analysis in key areas
and revenues related to activities with a potential such as energy, waste and environmental protection
environmental impact. Accordingly, an adequate Investment appraisal to include environmental
accounting system that considers both environmental factors, development of new accounting and
and economic impacts is important in assisting information systems to cover all areas of
companies to fulfill their environmental management environmental performance, assessing the costs and
tasks (Burritt, Hahn & Schaltegger, 2001). benefits of environmental improvement programs,
developing accounting techniques which express
ECD can be defined as the generation and analysis of
assets and liabilities and costs in ecological (non-
both financial and non-financial information in order
financial) terms. Vasile and Man (2012) define
to support internal environmental management

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environment management accounting (ECD) as the Environment, scientific editor and writer John J.
process of identification, collection, calculation Berger defined environmental restoration (or “natural
(estimation), analysis, internal reporting and use of resource restoration”) as follows:
cost information regarding materials and energy, and "… A process in which a damaged resource is
environmental costs within the decision process so as renewed. Biologically. Structurally. Functionally."
to adopt convenient decisions capable of contributing
environmental protection. USEPA (2005) asserts that Although the international field of restoration is
the term environmental accounting has many driven primarily by the non-profit, government and
meanings and uses. It can refer to national income academic sectors, in the U.S and certain other
accounting, financial accounting, or internal business countries (e.g. Australia, which has a robust mining
managerial accounting. National income accounting restoration sector), there are active markets for
is a macroeconomic measure. GDP is an example and ecological restoration.
has been frequently used as a key measure of the 2. Environmental Pollution Control
society’s economic wellbeing with the consideration Environmental Pollution control is any action (large
of environmental depletion and degradation costs. In or small) that reduces the amount of contaminants
this context, environmental accounting has been released into the environment. By implementing P2
termed ‘natural resources accounting’. Financial processes, fewer hazards will be posed to both public
accounting refers to the estimation and public health and natural wellbeing.
reporting of environmental liabilities and financially
Pollution is the contamination of air, soil, or water by
material environmental costs based on generally
the discharge of harmful substances. Pollution control
accepted accounting principles (GAAP). Management
is the reduction or elimination of pollution at the
accounting is the process of identifying, collecting,
source (source reduction) instead of at the end-of-the-
and analyzing environmental information primarily
pipe or stack. Pollution control occurs when raw
for internal purposes. Unlike financial accounting,
materials, water, energy and other resources are
which is ruled or governed by GAAP, management
utilized more efficiently, when less harmful
accounting practices and systems can be tailored to
substances are substituted for hazardous ones, and
meet the needs of the business they serve. Deegan
when toxic substances are eliminated from the
(2003) defined environmental accounting as a broader
production process. By reducing the use and
term that relates to the provision of environmental-
production of hazardous substances, and by operating
performance related information to stakeholders both
more efficiently we protect human health, strengthen
within and outside the organization. While
our economic well-being, and preserve the
environmental accounting can be ‘corporate-focused’,
environment.
it should also be appreciated that environmental
accounting can also be undertaken at a national or Source reduction allows for the greatest and quickest
regional level. Howes (2004) opines that improvements in environmental protection by
environmental accounting is all about the link avoiding the generation of waste and harmful
between environmental and financial performance emissions. Source reduction makes the regulatory
more visible, getting ‘environmental sustainability’ system more efficient by reducing the need for end-
embedded within an organization’s culture and of-pipe environmental control by government.
operations and providing decision-makers with the NPPR supports multi-media P2 approaches which
sort of information that can help them to reduce costs work to solve environmental problems holistically
and business risk and to add value. Environmental and do not only focus on pollution in a single medium
management accounting is viewed as an extension of (air, land, or water). Well-intentioned rules,
conventional management accounting. regulations and solutions that are not multi-media
Operational Variables sometimes exacerbate existing conditions by creating
1. Environmental Restoration larger problems to other media that are not accounted
Environmental restoration is closely allied with (or for by a single media-specific solution. Many times
perhaps sometimes used interchangeably with) this can result in the transfer of pollution from one
ecological restoration or environmental remediation. medium to another. For example, in some cases, by
In the U.S., remediation is the term used more in the requiring hazardous air emission controls for
realms of industry, public policy, and the civil industrial facilities, other problems might result, such
services. Environmental restoration is a term common as pollutants being transferred to underground
in the citizens’ environmental movement. drinking water through the residual sludge.
In the 1987 edition of his book restoring the Earth: Adopting pollution prevention practices and
How Americans are working to renew our Damaged techniques often benefits industry by lowering a

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company’s operational and environmental compliance 2006) performance measures are the life blood of
costs. By preventing the generation of waste, P2 can economic units, since without them no decisions can
also reduce or eliminate long-term liabilities and be made. Financial performance Measure is one of
clean-up costs. Furthermore, disposal costs are the important performance measures for economic
reduced when the volume of waste is decreased. This units. Financial performance measures are used as the
can also lead to a reduction in workplace exposures to indicators to evaluate the success of economic units in
hazardous materials which can affect workers’ health achieving stated strategies, objectives and critical
and hence, their productivity. success factors (Katja, 2009).
Corporate Performance Return on Assets (ROA)
There are various aspects of performance, each of ROA gives profitability on assets of the firm after
which contributes to the overall performance in an meeting all expenses and taxes. It measures the profit
organization. Despite the evolution of various of the firm after tax for each dollar invested in assets
available benchmarks and performance measurement, (Horne & Wachowicz 2005). It is indicator of
the answer to what is performance may still be hard to managerial performance. So, higher value of this ratio
pin down. Hansen and Mowen (2005), states that firm means better managerial performance (Ross,
performance is very essential to management as it is Westerfield & Jaffe 2005).
an outcome which has been achieved by an individual ROA can be increased by increasing profit margin or
or a group of individuals in an organization related to asset turnover.
its authority and responsibility in achieving the goal
legally, not against the law, and conforming to the ROA = Net Profit / Total Assets.
morale and ethic. Performance is the function of the Empirical Review
ability of an organization to gain and manage the Quite numbers of studies have been examined on
resources in several different ways to develop environmental issues in relation with financial
competitive advantage. performance of corporate organizations. Nwaiwu and
Hansen and Mowen (2005), states that firm Oluka (2018) examined the effect of environmental
performance is very essential to management as it is cost disclosure and financial performance measures of
an outcome which has been achieved by an individual quoted oil and gas companies in Nigeria. Time series
or a group of individuals in an organization related to data were collected from annual financial reporting
its authority and responsibility in achieving the goal and economic review of Central Bank of Nigeria;
legally, not against the law, and conforming to the Pearson product moment coefficient of correlation
morale and ethic. Performance is the function of the and multiple linear regression analysis with the aid of
ability of an organization to gain and manage the special package for social sciences (SPSS) version 22.
resources in several different ways to develop The econometric results reviewed adequate disclosure
competitive advantage. on environmental cost, compliance to corporate
environmental regulations have positive significant
The main objective of financial performance effect on financial performance measures. Okafor
measuring is to determine the operating and financial (2018) ascertaining the effect of environmental costs
characteristics and the efficiency and performance of on firm performance. To achieve this objective, the
economic unity management, as reflected in the study made use of financial reports of Oil and Gas
financial records and reports (Amalendu, 2010). Companies quoted in the Nigerian Stock Exchange
Akinsulire, (2008) points out that no performance Market from years 2006-2015. Regression analysis
review is beyond dispute, for instance, reported profit was employed with the aid of Statistical Package for
is a matter of opinion. If income is to be measured in Social Sciences (SPSS). The results of the statistical
terms of the increase or decrease in the wealth of an analysis indicate that better environmental
enterprise, obviously some definitions of that stock of performance positively impact business value of an
wealth is required. Pandy, (2003) measures wealth in organization. Olaoye and Adekanmbi (2018)
three categories; as financial capital – the equity stake examined the impact of environmental management
in an enterprise in money terms; real financial capital, accounting practices and report on organization
the equity stake in an enterprise in real terms (the performance. The study made use of descriptive
proprietary concept); operating capacity capital, the design survey type through structured questionnaire
ability of the enterprise to maintain its ability to and the study employed stratified random and
provide goods and services (the entity concept). purposive sampling as sampling techniques. The
In addition, measuring performance is very important findings of the study revealed that there is low present
because it builds on the results, make different practice of environmental management accounting in
decisions in economic units. According to (Benjalux, South West Nigerian universities. Hengky, Charbel,

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Ana, Samuel and Muhammad (2018) examined the and iii) social dimensions against banking
effect of the combination of corporate environmental performance which they measured using ROE.
strategy, top management commitment, and Employing a panel data analysis technique, their
environmental uncertainty, with a focus on the role of results reveal that sustainability disclosures as well as
environmental Cost Disclosure (ECD), on corporate economic, environmental and social disclosures have
environmental performance. The empirical evidence no significant effects on the banking performance of
shows that there is a positive and significant influence UAE banks, whether they are conventional or Islamic
between those organizational resources (corporate banks. Ezejiofor, John-Akamelu, and Chigbo (2016)
environmental strategy, top management assess the effect of sustainability accounting measure
commitment, and environmental uncertainty) on the on the performance of corporate organizations in
use of ECD, which in turn can improve the Nigeria. Ex post facto research design and time series
environmental performance of companies. Arshad data were adopted. Data for study was collected from
(2018) assessed whether a company organization in annual reports and accounts of the company in
Erbil, Kurdistan Region has an influence on profit. Nigeria. Formulated hypotheses were tested using
This study, based on 50 local and international firms Regression Analysis with aid of SPSS Version 20.0.
located in Erbil, KRG, were given a questionnaire, The study found that environmental cost does not
which was answered, by either the CFO or the impact positively on revenue of corporate
accountant of the firm. Companies can have flash on organizations in Nigeria. Owolabi, Akinwunmi,
many important possible regulations such as raise Adetula & Uwuigbe (2016) examined the extent of
awareness among people to use public transportation, sustainability reporting practiced by Lafarge Africa
also the environmental issues become crucial to Plc. Content analysis was used to analyze the data
humanity if forget about environment and do extracted from their annual reports and the Global
whatever needed then the results will be very bad. Reporting Initiative (GRI) G4 sustainability reporting
Mayangsari (2018) investigated the influence of guideline was used as a basis of assessment. The
environmental performance on the financial report study found no disclosures on human rights issues,
integrity. The statistics used were primary data from 3% environmental disclosures and an aggregate of
interviews with senior members of the mining sector 30% disclosure based on one hundred and sixty-nine
regarding environmental issues, as well as secondary indicators used. Malarvizhi and Ranjanni (2016)
data using Financial Report 2016. The samples were conducted a research to examine whether there is any
listed mining companies with semester data. This significant relationship between Corporate
study employed KLD as a proxy for environmental Environmental Disclosure (CED) and firm
performance, correlated with other variables performance of selected companies listed in Bombay
regarding the integrity of disclosure. The outcome Stock Exchange (BSE), India. They use content
indicates that environmental issues will increase the analysis methodology by developing an
integrity of financial reports. Amacha and Dastane environmental disclosure index (EDI) and
(2017) examined the relationship between formulating hypotheses to test the association
sustainability practices and firm performance in the between firm performance and level of environmental
Malaysian Oil and Gas sector. Their specific disclosure. Results show there is no significant
objectives were to conduct a data analysis to relationship between the level of environmental
understand the relationship between environmental, disclosure and firm performance. Ijeoma (2015)
social and governance performance and financial determined the role of environmental cost accounting
performance which was measured using EBIT, EPS towards environmental sustainability in Nigeria. The
and PE ratio. Secondary data sources as sourced from research instrument was randomly administered to
a sample size of 21 oil and gas firms from 2011 – 200 respondents from organizations in Nigeria:
2013. With the aid of a multiple regression model run Agricultural/Agro-Allied, Breweries, Chemical and
via SPSS 21, there result shows that the majority of Paints, Health Care/Pharmaceutical and Oil
oil and gas companies in Malaysia had poor Marketing companies. The findings of the study
performance in terms of sustainability disclosure. revealed that majority of the respondents agreed that
Nobanee and Ellili (2017) investigated the impact of business organizations in Nigeria have not being
economic, environmental, and social sustainability aware of environmental policies. It was also found
reporting on financial performance of UAE Banks in that that there exists no significant difference on
Abu Dhabi Securities Exchange and the Dubai business organizations in Nigeria not being aware of
financial market during the period 2003-2013. The environmental policies. Shehu (2014) examined the
study employed three sustainability disclosure effect of environmental expenditure on the
dimensions including i) economic, ii) environmental performance of quoted Nigerian oil companies,

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within a period of twelve years (1999-2010) using level of web-based corporate environmental
selected firm financial statement of all quoted oil disclosure among the selected firms. Fisher-Vanden
companies listed in the Nigerian Stock Exchange. The & Thorburn (2011) examined the valuation effect of
data was analyzed using multiple regressions, voluntary corporate environmental initiatives on
employing ROA and three independent variables; shareholders wealth using an event study approach.
Cost of Environmental Remediation and Pollution The study show that when firms announce their
Control (ERPC), Cost of Environmental Laws membership in the Environmental Protection
Compliance and Penalty (ELCP), Donations and Agency’s Climate Leaders, a program intended to
Charitable Contributions (DCC). The result reveals reduce greenhouse gas emissions, the announcement
that environmental expenditure has a significant is met with negative abnormal returns.
effect on the performance of quoted oil companies in Most of researchers have explored how the stringency
Nigeria. Mohammad, Sutrisno, Prihat and Rosidi of the environmental policy regime affects a
(2013) examined stakeholder theory and legitimacy as company’s ECD applicability and financial
well as eco-efficient related to effect of performance. Most of the studies which examined the
environmental accounting implementation and relationship between environmental management and
environmental performance and environmental firm performance were inconsistent in their results.
disclosure as mediation on company value. Research Excluding the fact that specifics country and other
results indicate that environmental accounting peculiarities may influence the outcome of studies
implementation is able to affect on company value, conducted in both developed and developing
environmental information disclosure and on countries because of divers’ ways corporations
environmental information disclosure. Okoye and respond to environmental and social concerns in
Ezejiofor (2013) ascertained the sustainability different crimes. A look at the previous studies
environmental accounting in enhancing corporate particularly those by Nigeria authors show a large
performance and economic growth. This study domination of samples comprising only of a single
reviewed various forms including journal papers, sub-sector.
articles and other relevant materials. This paper
analyzed and tested two hypotheses with Pearson Methodology
Product Movement Correlation Co-efficient. The Research Design
study discovered that sustainable environmental Due to the nature of the study, ex-post facto research
accounting has significant impact on corporate design and content analysis data were adopted in
productivity in order to enhance corporate growth. collecting data from financial reports and accounts
Onyali, Okafor and Egolum (2014) assessed the from 2010-2019. Ex-post facto research design was
extent, nature and quality of environmental used to determine the effect of environmental cost
information disclosure practices of manufacturing disclosure and performance of quoted conglomerate
firms in Nigeria. Content analysis was adopted in firms Nigeria. Ex-post facto research design is used
analyzing the annual report of the selected firms with because the data already exist. The researcher
regards to their environmental disclosure practices. therefore, has no intention of manipulating the data.
This was done with the aid of questionnaire Population of the Study
administered to 40 Chartered accountants. The study The population of this study covered twelve Foods
adopted one sample t-test in testing the formulated and Beverages quoted on the Nigerian Stock
hypothesis. The findings of the study indicated that Exchange as at 2018. These Food and Beverages are
the environmental disclosure practices of firms in as follows;
Nigeria is still ad hoc and contains little or no 1. 7-Up Bottling Company Plc.
quantifiable data. Uwuigbe (2012) investigated the
2. Cadbury Nigeria Plc.
relationship between the financial performance of
3. Dangote Flour Mills Plc.
firms and the level of web-based corporate
environmental disclosure among other objectives. The 4. Dangote Sugar Refinery Plc.
study provides analytical evidence that a positive 5. Ferdinand Oil Mills Plc.
association existed between the variable corporate 6. Flour Mills Nigeria Plc.
environmental disclosure and Return on Assets, 7. Foremost Dairies Plc.
Return on Equity and Firm Size and they are all 8. National Salt Co. Nigeria Plc.
significant. The study further provides an insight to 9. Nestle Foods Nigeria Plc.
the fact that to a very great extent, the financial 10. Nigerian Bottling Company Plc
performance and the size of firms do plays a very 11. Northern Nigeria Flour Mills Plc.
significant role in or has a strong influence on the 12. Union Dicon Salt Plc.

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Sample Size The Independent variables:
As a result, the "purposive sampling technique was
ENVRC = environmental restoration costs
applied (Non-random sample). In this method, the
sample is chosen based on what the researcher thinks ENVPCC = environmental pollution control cost
is appropriate for the study. A total of nine (9) out of a0 = slope of the model
the twelve (12) companies were inevitably excluded
during the data collection process due to incomplete βI, β2, = coefficient of parameters.
data. Data Presentation and Analysis
One of the limitations of this sampling technique is Data Analysis
the possibility of being prone to researcher bias. Table 1: Descriptive Statistics
Purposive sampling is based on the researcher. That ROA ENVRC ENVPPC
means their conscious or unconscious bias goes into Mean 0.019100 1.500000 2.100000
the data being collected. That bias may make the data Median 0.020500 1.500000 2.000000
seem to be valid, but it can also influence the data and Maximum 0.036000 3.000000 3.000000
provide false results. Minimum -0.015000 0.000000 0.000000
Std. Dev. 0.014012 1.080123 0.994429
Source of Data
Skewness -1.340221 1.39E-17 -0.914695
To obtain reliable information that helped the
researcher to ensure the effectiveness of the study in Kurtosis 4.757035 1.870748 2.971468
question, data were collected from only secondary Jarque-Bera 4.279977 0.531337 1.394783
sources. The study used secondary data extracted Probability 0.117656 0.766693 0.497882
from the audited annual reports and accounts of the Sum 0.191000 15.00000 21.00000
quoted Foods and Beverages firms in the Nigeria Sum Sq. Dev. 0.001767 10.50000 8.900000
stock exchange. Panel data of six conglomerate firms Observations 10 10 10
for seven years were collected from the annual reports The above shows the mean of each variable, their
and accounts of Food and Beverage firms in Nigeria maximum values, minimum values, standard
(2010-2019). The researcher collected data up to deviation, skewness and Jarque-Bera (JB) Statistics
2019. These data were considered useful because they (normality test). The results in the above table
have been audited and filed with NSE. provided some insight into the nature of the selected
Method of Data Analysis Nigerian quoted firms that were used in this study.
The statistical model chosen for the analysis is Firstly, it was observed that on the average over the
multiple regressions, with the aid of E-view 9.0 ten years periods (2010-2019), the sampled quoted
software. Three sets of hypotheses were advanced for firms in Nigeria were characterized by positive return
confirmation in this study. on assets (ROA = 0.019100). Also, the large
Decision Rule difference between the maximum and minimum value
The decision for the hypotheses is to accept the of the environmental protection cost = (ENVPC),
alternative hypothesis if the P-value of the test pollution control cost (ENVPCC) show that the
statistic is positive and significant at 5% significant sampled quoted firms in this study are not dominated
level. P-value less than 5%, reject, P-value greater by firms with large equity share. Looking at the
than 5% then do not reject. negative skewness, implies that the distribution has a
long left tail.
Model Specification
The estimated model takes the following form: Secondly, we also observed that the average ENVRC
value over the period was 1.50000, the maximum
ROAit = a0 + µ i + β1ENVRC +β2ENVPPCit + t ∑it value was 3.0000 while the minimum stood at 0.0000.
…..………………..…..................... (i) This shows that most quoted firms in Nigeria are with
ROAit = a0 + µ i + βIENVRCit + ∑it high market value or have more investment value.
…………………………….……………... (ii) Lastly, in Table 1, the Jarque-Bera (JB) which test for
normality or the existence of outlier or extreme values
ROAit = a0 + µ i + βIENVPPCit +∑it
among the variables shows that all our variables are
………………………………..……….…. (iii)
normally distributed and significant at 5% level and
Where: the result could be generalized. This also implies that
The dependent variable: Corporate performance a least square regression can be used to estimate the
(ROA) and pooled regression models.

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Table 2: Correlation Analysis Matrix In checking for multi-colinearity, we notice that no
ROA ENVRC ENVPPC two explanatory variables were perfectly correlated.
ROA 1.0000 This means that there is no problem of multi-
ENVRC -0.0917718 1.0000 colinearity between the explanatory variables. Multi-
ENVPPC -0.1682602 -0.1551681 1.0000 colinearity may result to wrong signs or implausible
magnitudes in the estimated model coefficients, and
The use of correlation matrix in most regression the bias of the standard errors of the coefficients.
analysis is to check for multi-colinearity and to
explore the association between each explanatory Testing of Hypotheses formulated
variable (ENVRC, ENVPCC and ENVPC) and the In other to examine the impact relationships between
dependent variable (ROA). Table 2 focused on the the dependent variable ROA and the independent
correlation between return on assets measured as net variables (ENVRC, and ENVPCC) and to also test
income over total asset and the independent variables our formulated hypotheses, we used a pooled multiple
(ENVRC, and ENVPCC). regression analysis since the data had both time series
(2010-2019) and cross sectional properties (9 foods
Finding from the correlation matrix table shows that and beverage firms). The pooled interaction based
all our independent variables, (ENVRC= -0.918, and multiple regression results are presented and
ENVPPC = -0.168) were observed to be negatively discussed in Table 3 below
and weakly associated with firm performance (ROA).
Table 3: ROA Pooled Regression Results
Dependent Variable: ROA
Method: Least Squares
Date: 03/18/21 Time: 09:43
Sample: 2010 2019
Included observations: 10
Variable Coefficient Std. Error t-Statistic Prob.
C 0.009264 0.023955 0.386750 0.7123
ENVRC -0.001541 0.004889 -0.315218 0.7633
ENVPPC -0.002454 0.005313 -0.461818 0.6605
R-squared 0.168381 Mean dependent var 0.019100
Adjusted R-squared -0.247429 S.D. dependent var 0.014012
S.E. of regression 0.015649 Akaike info criterion -5.187617
Sum squared resid 0.001469 Schwarz criterion -5.066583
Log likelihood 29.93809 Hannan-Quinn criter. -5.320391
F-statistic 0.404946 Durbin-Watson stat 2.122361
Prob(F-statistic) 0.755121
In Table 3, R-squared and adjusted Squared values were (0.168) and (-0.247) respectively. The indicates that all
the independent variables jointly explain about 8% of the systematic variations in return on assets (ROA) of our
samples firms over the ten years periods (2010-2019). The F-statistics (0.404) and its P-value (0.71) show that
the ROA regression model is well specified, thereby, making the regression fit for prediction purpose.
Test of Autocorrelation: using Durbin-Waston Environmental Restoration Costs (ENVRC), based
(DW) statistics which we obtained from our on the t-value of -0.315218 and p-value of 0.7633,
regression result in table 3, it is observed that DW was found to have a negative influence on our
statistics is 2.122 and an Akika Info Criterion and sampled quoted firms and this influence was not
Schwarz Criterion which are -5.188 and -5.066 significant as its p-value is higher than 0.05 values.
respectively also further confirms that our model is This result, therefore suggests that we should accept
well specified. In addition to the above, the specific our null hypothesis one which states that
findings from each explanatory variable are provided environmental restoration cost has no effect on
as follows: performance of quoted foods and beverages firms in
Nigeria. However, this result is not statistically
Hypothesis One
Ho: Environmental restoration cost has no effect on significant and therefore should not be used for any
performance of quoted foods and beverages firms in policy consideration.
Nigeria.

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Hypothesis Two Control Cost have negative effects on performance of
Ho: Environmental Pollution control cost has no quoted foods and beverages firms in Nigeria but this
effect on performance of quoted foods and beverages effect was not significant. While Environmental
firms in Nigeria. Protection Cost disclosure has positive effect on
performance of quoted foods and beverages firms in
Environmental Pollution Control Cost (ENVPCC),
Nigeria but this was not significant. This indicates
based on the t-value of -0.461818 and p-value of
that continuous environmental evaluation handled in
0.6605 was found to have a negative influence on our
an acceptable way garners sales and therefore
sampled quoted firm performance and this influence
improved income. The implication is that the
was not significant since its p-value was more than
compliance to environmental laws enhances financial
5%. This result therefore suggests that we should
performance of the firm. Meanwhile, environmental
accept our null hypothesis two which states that
related cost disclosure influence firm’s positively and,
environmental Pollution control cost has no effect on
hence, firms not significantly reported and discloses
performance of quoted foods and beverages firms in
environmental related information, as environmental
Nigeria. However, this influence is not statistically
friendly organization enjoys high level of corporate
significant and so, should be ignored.
cooperativeness.
Discussion of Results
Based on the outcomes from the hypotheses two Recommendations
Based on the finding of this study, the researcher
shows that Environmental restoration cost has
recommends as follows:
negative effect on performance of quoted foods and
1. That implementation of greener technique i.e
beverages firms in Nigeria but this was not
environmental restoration enhanced mark-up to
significant. Environmental Pollution Control Cost has
protect the environment and increased firms’
negative effect on performance of quoted foods and
return on assets.
beverages firms in Nigeria but this was not
2. That firms should make policies that will control
significant. This finding agrees with Ezejiofor, John-
environmental pollution in order to reduce cost.
Akamelu, and Chigbo (2016) whose study found that
environmental cost impact positively on revenue of References
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