The Impact of Profitability on Environmental Disclosure of Quoted Firms in Nigeria

Abstract

This study has focused on assessing the impact of profitability on environmental disclosure of quoted firms in Nigeria, for the year 2016. The research has been undertaken on all companies listed in the Nigeria Stock Exchange (NSE). This study examines the impact of profitability on Environmental Disclosures of quoted firms in Nigeria. The study adopts a cross-sectional research design. The study used a sample of 82 firms from the total population of 176 firms listed on the Nigeria Stock Exchange for a period of 5 years ranging from 2012 to 2016. Method of data collection was secondary data. The study employed Binary regression Logistic techniques as the method of data analysis. The findings of the study indicates that a significant relationship exist between profitability and environmental disclosures with a probability value which shows 0.0141 at 5% level of significance. Since the P-value calculated of 0.0141 is less than 5% level of significance, the study therefore rejects the null hypotheses that no relationship exists between profitability of quoted firms and environmental disclosures. The study therefore concludes that firm voluntarily disclose the effect of their operations on the environment they operate. The study recommends that government should compel companies aspiring to be listed on the Nigeria Stock Exchange to provide environmental risks disclosures as one of the pre-requisites for listing and should be enforced to continually provide such environmental disclosures while presenting their annual reports and accounts. The implication of the findings is that though the study revealed that there is a significant relationship between Environmental Disclosure and Profitability, it should be noted that in event of companies incurring losses, it will have effect on environmental disclosure.