Environmental Cost Disclosure and Quality Sustainability Reporting: Evidence from Agricultural Firms Listed at the Nairobi Securities Exchange, Kenya

Sustainability reporting quality among agricultural firms listed on the Nairobi Securities Exchange (NSE) remains inconsistent. This persists despite growing stakeholder expectations for verifiable environmental accountability. Environmental costs, including pollution control, waste management, and remediation expenditure, are often disclosed voluntarily and without a standard classification framework. This study examined the influence of environmental cost disclosure (ECD) on quality sustainability reporting (QSR) among listed agricultural firms in Kenya. It also assessed whether environmental management accounting (EMA) conditions this relationship. The study used an explanatory research design and a ten-year panel covering 2015-2024. All seven NSE-listed agricultural firms were included through a census, giving a maximum of 70 firm-year observations. ECD was measured as total environmental costs divided by total revenue. QSR was measured using a validated eleven-dimension index. Descriptive statistics, correlation analysis, and pooled panel ordinary least squares models were applied. ECD had a positive but statistically non-significant direct association with QSR in the direct-effects model. In the full interaction model, the ECD by EMA term was positive and marginally significant at the 10% level. These results suggest that internal environmental accounting capacity may strengthen the association between cost disclosure and reporting quality. The estimates should be interpreted cautiously because the effective regression sample was 48 firm-year observations and the models showed positive serial correlation. The study recommends clearer environmental cost classification guidance, stronger EMA systems, and further research using larger panels and robust panel estimators.

Environmental Cost Disclosure, Environmental Management Accounting, Quality Sustainability Reporting, Agricultural Firms, Nairobi Securities Exchange, Kenya

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