Journal of Emerging Trends in Economics and Management Sciences: Home

Article Title:
Investigating The Effect Of Environmental Risk Disclosure On Financial Performance: Evidence From Listed Firms Operating In The Non-Financial Sector In Nigeria
by Romoke Rafiat Busari, PhD and Olabamiji Atanda, PhD

Abstract:
Environmental challenges have intensified corporate pressure to enhance transparency, yet the financial impact of environmental risk disclosures remains inconclusive, especially within developing economies like Nigeria where regulatory enforcement is weak and voluntary disclosure practices vary significantly. This study investigates the effect of environmental risk disclosures on the financial performance of listed non-financial firms in Nigeria, focusing on three key dimensions: carbon emission risk disclosure, biodiversity risk disclosure and compliance to environmental laws disclosure. The study utilizes panel data from 76 listed non- financial firms on the Nigerian Exchange Group over a 10-year period (2014?2023). Descriptive statistics, Shapiro-Wilk normality tests, Spearman correlation and robust regression techniques are employed due to the presence of heteroscedasticity. The empirical findings reveal that carbon emission risk disclosure has a statistically significant positive effect on financial performance, suggesting that proactive climate-related transparency enhances firm value. Conversely, biodiversity risk disclosure exhibits an insignificant effect. Lastly, compliance to environmental laws disclosure shows a significant negative effect, highlighting the potential financial burden of regulatory adherence in weak institutional contexts. The study concludes that while some environmental disclosures create strategic value, others may be perceived as cost drivers unless communicated within a broader value-creation narrative. The study recommends tailored regulatory framework, improved biodiversity reporting standards and strategic framing of compliance disclosures. _____________________________________________________________________________________________ Keywords: Environmental Risk Disclosure, Financial Performance, Voluntary Disclosure, Heteroskedasticity

Keywords: Environmental Risk Disclosure, Financial Performance, Voluntary Disclosure, Heteroskedasticity

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