Environmental Remediation Cost Disclosure and Value Creation: Impact Analysis

Business activities to meet the target market needs and satisfy stakeholders result in Environmental threats, such as, degradation, pollution, oil spillage, gas flaring, climatic changes, depletion of freshwater supplies, deterioration of natural resources, habitat loss, anti-social activities, and societal unrest. The study investigated environmental remediation cost and value creation of listed consumer products companies over a period of Ten (10) years in Nigeria. It looked into how the value creation of these Nigerian listed companies is impacted by the expenditures associated with community development, waste management, and employee health and safety. An ex-post facto research design and secondary sources of information obtained from the published annual reports of the purposively sampled sixteen (16) out of Twenty-One (21) Nigerian publicly traded consumer goods companies. Data collected were analysed using descriptive statistics and multivariate regression analysis. It was discovered that the value creation of these firms is negatively and negligibly impacted by expenditures associated with community development and employee health and safety but positively and negligibly impacted by waste management cost disclosure. The investigation, therefore, concluded that these companies environmental remediation costs disclosure influences how they were valued. It recommended that these companies and other Nigerian firms, should enhance transparency and accountability in the disclosure of their environmental-related activities as it has shown evidence of its influence on earnings per shares. Companies should carefully assess the trade-offs between environmental remediation efforts and value creation, prioritize actions that agree with their corporate goals and have the greatest potential to enhance long-term value creation.

Environmental remediation cost, value creation, community development cost, waste management cost

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