Effect of Environmental Costs on Firm Performance

Effect of Environmental Costs on Firm Performance

ABSTRACT

The paramount importance in most management settings for environmental cost and its management in manufacturing/oil and gas companies has become the concern and focus of most companies. However, the sample of companies used for the study are Nigerian Breweries Plc., Dangote Cement Plc. Conoil Nigeria Plc., MRS Oil Nigeria Plc., and Total Nigeria Plc. The data used in this study were extracted from the financial annual reports of the selected corporate management strategies. This study carried out an empirical analysis of the effect of environmental costs on firm performance of selected companies in Nigeria covering the period 2010-2019. The population of this study is a constitution of all manufacturing/oil and gas companies enlisted in the Nigeria Stock Exchange companies. In this study, environmental cost was captured with health and safety expenditures, staff training and litigation claims/fines, while performance was captured with profit for the year.  The panel data regression analysis was employed as a method of data analysis. The major findings of the study were that health and safety costs have no significant impact on profit for the year of selected companies in Nigeria, staff training contributed positively and have significant impact on profit for the year of selected manufacturing oil and gas companies in Nigeria and litigation claim/fines contributed negatively and have no significant impact on profit for the year of selected companies in Nigeria. The study, therefore, recommended that the management of these companies should be more strategic in engaging in such expenses and cost engagements and companies should however be more careful not to keep incurring litigations claims/ fines by conducting their activities with serenity and consideration.

Keywords: Environmental Costs; Firm Performance; Nigeria

Authorship
OKAFOR, Edith Akunne1, Professor OKWO, Ifeoma Mary2 and Professor NWOHA, Chike E.3

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