CHAPTER ONE INTRODUCTION 1.1 Background to the Study Earth environment is a rich heritage handed over to us by previous generations. The present civilization has involved us in varied activities. Many of these activities generated waste with potential constituents. The ultimate disposal of the waste lead to environmental pollution in many parts of the world, the magnitude of pollution of the environment has already reached an alarming level. Pramanil, Shiland Das, (2007) cited in Bassey et al (2013). Corporate environmental disclosure entails reporting on the impact of company activities on the natural environment such as waste management, recycling, carbon management, emission, pollution, and wetland and wildlife conservation. Conventional accounting systems are limiting since they fail to directly address sustainability concerns. They have failed to address economic growth against social and environmental needs in order to balance the different needs of various stakeholders Gatimbu and Wabwire(2016). This is significant to businesses considering the long term needs for the business to survive and to make profit without hitch from the business environment. Environmental disclosure is important information regarding company's activities that is conducted in an ethical manner at globalization era. This is caused by proliferation of media coverage on issue of climate change and global warming, as well as national disasters, both naturally or company negligence. This symptom encourages greater attention to sustainability reporting, and raises questions about transparency of disclosure and role of accounting information in generating financial information relevant and reliable. This phenomenon is a serious problem that needs to be thought the solution by all parties, including accounting disciplines. On other hand, costs that must be borne by production activities have not been able to include environmental degradation and future costs. This company's environmental responsibility should be one of performance indicators Mohammad, Sutrisno, Prihat, and Rosidi (2013). Mohammad et al (2013) noted that Environmental performance is needed because company legitimacy can be achieved by showing activity that accordance with local stakeholder value. Based on environment context, there are two dimensions of legitimacy achievement, namely action and presentation, while action is an organization activities tailored to local community values, presentation related to activities carried out, whether it has met stakeholder’s expectations or not. On other hand, a significant environmental problem is associated with existence of company activity. It became an important environmental issue and an increase due to ever-expanding range of company stakeholders, which include customers, shareholders, potential investors, creditors, employees and general public. Addressing environmental challenges that emanates from corporate operations suggests that Nigeria corporate organizations, likely have been able to identify and develop clear views of society’s preference and priorities as activities that will make a n environmental impact which will enhance reporting in a meaningful way on their environmental performance. However, there are other issues to contend with besides identifying and developing society’s preference and priorities and that is for corporation to engage in corporate environmental activities in order to make a meaningful disclosure of their performance. It is in the light of the importance attributed to the environmental performance of companies that this research seeks to investigate the effect of corporate environmental disclosure on the earning per share as a measure of performance in the Nigerian context. 1.2 Statement of Research Problem It is possible that environmental disclosure impacts on financial performance of a firm in the long run. The reporting is voluntary in Nigeria but companies are engaging in it either to enhance reputation, increase their brand visibility, show their commitment for concern on community, environmental protection or employee welfare. Gatimbu and Wabwire (2016) noted that environmental disclosure is becoming popular unlike in the past when companies included a general statement about community involvement in their annual reports. However, previous studies on the effect of environmental disclosure on financial performance of organizations yielded have been characterized by mixed result, while some researcher established a negative relationship; others posited a neutral or positive association, thus, indicating inconsistent results. In addition, many studies have focused on developed markets as opposed to emerging markets like Nigeria’s. Also, in the Nigeria context, there has been cases of unrest and destruction of entities’ properties having adverse implications for these companies as a result of environmental neglect on the company’s part. It is upon this background that this research seeks to establish the relationship between environmental disclosure and corporate financial performance using earnings per share as the measurement tool. 1.3 Research Questions The following pertinent questions are raised to guide this research work: i. To what extent does environmental disclosure affects company’s financial performance? ii. Is there relationship between Environmental disclosure and Earnings per share of companies? iii. To what extent does corporate sustainability disclosure leads to improved financial performance among listed companies still remains contentious? 1.4Objectives of the Study The main objective of this study is to examine the impact of workers’ remittance on economic growth in Nigeria Specifically, the study’s objectives include: 1. To investigate the relationship between Environmental disclosure and Earnings per share. 2. To ascertain to what extent environmental disclosure affects company’s financial performance. 3. The extent to which corporate sustainability disclosure leads to improved financial performance among listed companies still remains contentious 1.5 Research Hypotheses The hypotheses stated in null form Ho1: There is no significant relationship between Environmental disclosure and Earnings per share. Ho2 Environmental Disclosure is inversely related to company’s financial performance. 1.6Significance of the Study The effect of social and environmental disclosure on corporate financial performance has been examined by various researchers, such as Mohammad, Sutrisno, Prihat, and Rosidi (2013), Kwambo (2012), Bassey et al (2013) among others who make use of some research methodologies and theories which are important to this study. However, despite the importance of environmental accounting to corporate survival, there was too little literature on the effect of environmental disclosure on corporate financial performance, especially in the Nigerian context. Giving cognizance to the alarming rate of environmental degradation that has bewildered Nigeria as a result of companies operations and consequently, has led to serious crisis in some part of the country and adversely affected both the companies and their host communities negatively, it is imperative to pay a close attention to environmental accounting and give an empirical and viable analysis of how environmental disclosure has affected manufacturing companies in Nigeria as a guide to recommend ways in which our environment can be preserved while corporate organizations also maximize profitability. The significance of this study will be better appreciated by top level management of companies on the need to use environmental performance and disclosure as a tool to strengthen corporate image and attract public interest (consumers, shareholders and investors). Accountants and researchers will also benefit from the study as it will avail them more literature and serve as a reference on the effect of environmental disclosure on economic growth. 1.7 Scope of the Study The objective of this study is to determine the relationship between corporate environmental disclosure and corporate financial performance of consumer goods sector of Nigeria with particular emphasis on earnings per share. To achieve this objective, content analysis will be used to collect environmental disclosure and corporate financial performance data from annual financial reports of selected consumer goods industries listed on the Nigeria Stock Exchange. The study will cover the annual report and financial statement of these companies between a four (4) year period of2012 and 2015. 1.8 Plan of the Study This work is planned in a way to convey an in-depth understanding to the readers. It consists of five (5) chapters. Chapter one presents the introductory part and it deals with the whole idea behind the research works which include; Background of the study, the Research Objectives, the Significance and Scope of the study among others. Chapter two deals with Literature Review viz: Conceptual, Theoretical and Empirical reviews and the Gaps in literature. Chapter Three will focus on Research Methodology, research design, population of the study, sample size, data validity and reliability, method of data analysis among others. Chapter Four will concentrate on data presentation and analysis and hypotheses testing. Chapter five deals with summary, conclusion and recommendations of the study. 1.9 Operation Definition of Terms 1. Earnings per Share: EPS is the portion of a company’s profit allocated to each outstanding share of common stock. 2. Environmental Disclosure: Reporting on the impact of company activities on the natural environment. 3. Societal Cost: These are costs that organization imposes on others for which they may not be held legally responsible and which cannot be compensated for in the legal system. 4. Private Cost: These are costs of capital equipment, raw materials and supplies incurred by a company 5. Environmental Cost: These are costs that the organization incurs to prevent, monitor and report environmental impacts.
DOWNLOAD COMPLETE PROJECT ₦10,000