Date of Publication :8th September 2024

Abstract:The need for firms to account for their environmental costs in line with global environmental awareness and the campaign for sustainable economic development has become rife. Firms also want to provide their stakeholders with reports on their sustainability performance, including environmental performance. This study examined the effect of environmental accounting reporting on firm performance among Nigerian-listed firms. The environmental performance scores include Environmental Greenhouse Gas Emissions, Water consumption, Energy consumption, Waste management, Land Biodiversity investment, and Polluting plants and Machinery to proxy environmental accounting reporting. Firm performance was proxy by Return on Asset (ROA), an accounting-based performance measure, and Tobin Q, and Price-to-Earnings ratio (P/E ratio), both market-based performance measures. The study also used firm age and debt-to-equity leverage as control variables. The population of the study is comprised of listed firms in Nigeria, totaling 161, while data were purposively obtained for 117 sample firms across all sectors in Nigeria from 2019 to 2022. Data were analyzed using the Ordinary Least Square regression analysis method. The study found no statistically significant relationship between environmental accounting reporting and ROA. The study also found a statistically significant positive relationship between environmental accounting reporting and the market-based variables of Tobin Q and Price-Earning (P/E) Ratio. The study recommended that the Security and Exchange Commission (SEC), the regulatory body for listed firms in Nigeria, should mandate firms to report and publish their environmental activities for inclusion in their financial statements, which could lead to improved environmental practices and enhanced market-based performance. The study further recommended that firm managers in Nigeria should endeavor to disclose their environmental performance, as this tends to improve their market-based performance, potentially leading to increased investor confidence and market value.

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