EFFECT OF ENVIRONMENTAL DISCLOSURE ON FINANCIAL PERFORMANCE OF LISTED CONSUMER GOODS FIRM IN NIGERIA

Abstract This study examined the effect of environmental disclosure on the financial performance of consumer goods firms in Nigeria from 2012 to 2022. A sample of thirteen listed consumer goods firms were used in the study. Environmental disclosure was measured using 34 GRI disclosure index. Financial performance was measured using ROA, ROE, EPS and NPM. Firm size, firm age and leverage were used as control variables. The hypotheses were tested using fixed effect and robust pooled regression analysis based on the Hausman and Lagrangian multiplier tests. The empirical results show that environmental disclosure has a significant positive effect on ROE of listed consumer goods firms in Nigeria but insignificant to ROA, ROE and NPM. On the other hand, firm age has a significant negative effect on ROA and EPS. While firms size and leverage has no effect on ROA, ROE, EPS and NPM. Based on these findings, the study concludes that consumer goods firms earnings per share (EPS) can be significantly boosted by environmental disclosures. Transparent environmental policies set businesses up for long-term success by boosting reputation, drawing in socially conscious investors, increasing operational efficiency, and reducing risks. In addition to being in line with changing market expectations, this strategic focus produces observable financial gains that eventually boost profitability and EPS. The study recommends that Consumer goods firms should be required by governments and regulatory agencies to include thorough environmental disclosures in their annual reports. Mandatory reporting on carbon emissions, resource consumption, waste management, and other important environmental indicators may be part of this. To guarantee uniformity and comparability, standardised reporting frameworks.