Environmental Accounting and Financial Performance of Listed Non- financial Firms in Nigeria

The research examines the effect of environmental accounting on the financial performance of listed non-financial firms in Nigeria, using return on assets and Tobin’s Q as proxies for accounting based and non-financial performance. The persistent decline in firm performance, reflected in weak asset utilization and low market valuation, has raised concerns among investors, regulators, and policymakers. In response, environmental accounting has emerged as a strategic approach for integrating environmental costs into corporate decision making. The study focuses on key environmental accounting components, including energy cost, health and safety cost, environmental security cost, and brand management cost, while controlling for firm size. An ex post facto research design was adopted, and secondary data were obtained from the audited annual reports of 44 purposively selected firms over the period 2015 to 2024. The data were analyzed using descriptive statistics and panel regression techniques. The findings show that environmental accounting has a significant effect on return on assets but does not significantly influence Tobin’s Q. Specifically, brand management cost exhibits a positive and significant effect on asset-based performance, while other components show insignificant relationships. The results suggest that environmental accounting improves internal efficiency, but its impact on market valuation is limited in the short term. The study concludes that environmental accounting enhances financial performance through improved cost management and transparency, although its effect on firm value remains indirect. The study recommends that firms strengthen environmental accounting practices and disclosure frameworks to support both profitability and long-term market confidence.