Effect of Environmental Disclosure on Shareholders’ Value Maximization: Evidence from Non-Financial firms in Nigeria

Abstract

This study examined the effect of environmental disclosure on shareholders’ value maximization. The population of the study is all quoted non financial firms listed in Nigerian Stock Exchange. Sample of 60 companies from different sectors were used for the period of ten years spanning from 2011 to 2020. The study employed ex-post facto and cross sectional research design. The secondary sources of data were collected from annual reports and account of the selected non financial firms quoted in Nigeria stock exchange and three (3) specific objectives and hypotheses were tested and analyzed. The panel data were subjected to preliminary data tests such as descriptive analysis, correlation analysis and Hausman effects tests for the period of ten years. Multiple panel least regression analysis was employed via E-Views 10.Using a sample of 600 firm-year observations, the result of the tested hypotheses revealed that employee health and safety disclosure, and environmental remediation disclosure have positive but insignificant effect on shareholders’ value maximization while environmental waste management disclosure has positive and significant effect on shareholders’ value maximization which was statistically significant at 5% level of significance. The study recommends among others, that managers of non-financial firms should pay more attention to environmental waste management disclosure in their host communities to boost their performance and hence add value to their shareholders’ wealth creation. Moreover, due attention should be paid to environmental remediation disclosure by non financial firms in Nigeria since such disclosure influence strategic decision such as shareholders’ value maximization.