ENVIRONMENTAL PENALTIES DISCLOSURES AND FINANCIAL PERFORMANCE OF LISTED INDUSTRIAL GOODS FIRMS IN NIGERIA

Abstract Despite the efforts of the Nigerian government to promote environmental sustainability through regulations and policies, the level of environmental disclosure of penalties among listed industrial goods firms in Nigeria remains a concern. Based on this, the study examined the effect of environmental penalties disclosures on financial performance of listed industrial goods firms in Nigeria. The study adopted an ex-post facto research design and utilized a panel data of ninety (90) pooled observations gathered from nine (9) listed industrial goods firms in Nigeria over ten (10)-year period (2015-2024). The study adopted multiple linear regression to analyze data via E-views 10.0. The data conformed to the standardized regression assumptions, that is, linearity, homoscedasticity, normality and independence of data. The study findings revealed that remediation penalties disclosure has a significant positive effect {Coeff = 0.1957 (0.0368)} on return on asset, reputational penalties disclosure has a significant positive effect {Coeff = 0.1102 (0.0481)} on return on asset, waste penalties disclosure has a significant positive effect {Coeff = 0.1980 (0.0082)} on return on asset, pollution levy disclosure has a non-significant negative effect {Coeff = -0.0944 (0.3545)} on return on asset and lastly, environmental stringency index disclosure has a significant positive effect {Coeff = 0.01291 (0.0071)} on return on asset of listed industrial goods firms in Nigeria. It was concluded that transparency in environmental reporting, particularly with regards to remediation, reputational, and waste penalties, can lead to improved financial performance. The study also recommended that Firms should also prioritize transparency in disclosing reputational penalties, as this can lead to improved financial performance. This can be achieved by including information on reputational risks and penalties in their annual reports and sustainability reports, and by engaging with stakeholders to build trust and credibility.