Effect of Green Accounting on Organizational Financial Performances of Listed Companies in Nigeria

Abstract

Businesses depend on the environment to function and prosper economically. The growth in industrialization has resulted in environmental pollution and increased land use that harmed the natural environment, leading to extinction of some animals and plants. The environmental impact of the organizations made various stakeholders to canvass for green accounting. This study aimed at examined the effect of green accounting on financial performances of listed companies in Nigeria Group exchange (NXG) between the period 2013-2023 using expo facto research design. Secondary data of the selected organization were downloaded from the NXG websites. The dependent variable was financial performances proxy with earnings per share, while independent variable was green accounting.  Using robust regression analysis, the study discovered that green accounting had negative and significant effect on earnings per share; implying that ₦1 increase in green accounting would reduce earnings per share by ₦36. Green accounting also had positive and significant impact on return on equity. This implied that organization expenses on protecting the environment increased which had short time negative effect on the earnings per share, but in the long run increase return on equity. The study recommended that companies should conduct environmental audits on a regular basis to evaluate their compliance with regulations, this would reduce the avoidable cost like compliance cost, restoration cost and it would improve earnings per share.