Firm-specific characteristics and environmental disclosure of energy firms in Sub-Saharan Africa

https://doi.org/10.35912/ijfam.v5i2.1601
Published: Sep 20, 2023

Abstract:

Purpose: This study investigated the relationship between firm-specific characteristics and environmental disclosure practices of energy firms in sub-Saharan Africa. It examines how profitability, size, and liquidity influence the environmental disclosure index (EDI) of listed energy firms in the region.

Research methodology: A quantitative approach was adopted, utilizing secondary data from the annual reports of energy firms listed in Nigeria, South Africa, and Kenya. Regression analysis was employed to assess the impact of firm-specific characteristics on EDI using waste management data based on the Global Reporting Initiative (GRI) 306 guidelines.

Results: The findings indicated that Profitability positively affected EDI, indicating greater transparency in reporting environmental initiatives for more profitable firms. Conversely, firm size is negatively correlated with environmental disclosure, suggesting challenges for larger firms in effectively communicating their environmental efforts. However, firm liquidity did not significantly affect EDI.

Limitations: One limitation of the study is its focus on energy firms in only three countries, limiting the generalizability of the findings to other sub-Saharan African nations.

Contribution: This research contributes to the literature by addressing environmental disclosure practices within sub-Saharan Africa's energy sector, offering stakeholders, policymakers, and regulators insights to promote transparency and sustainability in the industry.

Novelty: The novelty of this study lies in its examination of firm-specific characteristics and their influence on environmental disclosure practices in the energy sector of Sub-Saharan Africa. Using waste management data as a proxy for disclosure offers a fresh perspective on the reporting practices of energy firms in the region.

Keywords:
1. Firm-Specific Characteristics
2. Environmental Disclosure
3. Energy Firms
4. Sub-Saharan Africa
5. Global Reporting Initiative
Authors:
1 . Jerry Chukwuebuka Orajekwe
Department of Accountancy, Faculty of Management Sciences, Nnamdi Azikiwe University, Nigeria
2 . Okenwa Cy Ogbodo
Department of Accountancy, Faculty of Management Sciences, Nnamdi Azikiwe University, Nigeria
View PDF
How to Cite
Orajekwe, J. C., & Ogbodo, O. C. (2023). Firm-specific characteristics and environmental disclosure of energy firms in Sub-Saharan Africa. International Journal of Financial, Accounting, and Management, 5(2), 251–264. https://doi.org/10.35912/ijfam.v5i2.1601
Download Citation
  1. Endnote/Zotero/Mendeley (RIS)
  2. BibTeX

Downloads

Download data is not yet available.
Issue & Section
Vol. 5 No. 2 (2023): September
Articles
Creative Commons License

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

References

    Abubakar, A. A., Moses, S., & Inuwa, M. (2017). Influence of firms attributes on environmental disclosure in listed brewery companies in Nigeria. Civil and Environmental Research, 8(21), 31-35.

    Aghdam, S. A. (2015). Determinants of voluntary environmental disclosure: the case of Iran. International Journal of Basic Sciences & Applied Research, 4(6), 343-349.

    Agyemang, A. O., Yusheng, K., Twum, A. K., Edziah, B. K., & Ayamba, E. C. (2023). Environmental accounting and performance: empirical evidence from China. Environment, Development and Sustainability, 1-26.

    Antara, D., Putri, I., Ratnadi, N. M. D., & Wirawati, N. G. P. (2020). Effect of Firm Size, Leverage, and Environmental Performance on Sustainability Reporting. American Journal of Humanities and Social Sciences Research (AJHSSR), 4(1), 40-46.

    Bassey, B. E., Effiok, S. O., & Eton, O. E. (2013). The impact of environmental accounting and reporting on organizational performance of selected oil and gas companies in Niger Delta Region of Nigeria. Research Journal of finance and accounting, 4(3), 57-73.

    Brammer, S., & Millington, A. (2006). Firm size, organizational visibility and corporate philanthropy: An empirical analysis. Business Ethics: A European Review, 15(1), 6-18.

    Campbell, D. (2003). Intra?and intersectoral effects in environmental disclosures: evidence for legitimacy theory? Business Strategy and the Environment, 12(6), 357-371.

    Chukwuebuka, O. J., Obiora, O. O., & Ikechukwu, O. E. (2021). Corporate social responsibility and financial sustainability of oil and gas firms in Nigeria. Asian Journal of Economics, Business and Accounting, 21(19), 46-56.

    Dibia, N. O., & Onwuchekwa, J. C. (2015). Determinants of environmental disclosures in Nigeria: A case study of oil and gas companies. International Journal of Finance and Accounting, 4(3), 145-152.

    Ezekwesili, T. P., & Ezejiofor, R. A. (2022). Firm characteristics and environmental performance: A study of listed conglomerates in Nigeria. Innovations, 68(1), 69-82.

    Fabian, O., & Emeka, O. (2022). Effect of environmental reporting on liquidity of firms in Nigeria. Asian Journal of Advances in Research, 636-646.

    Gachoka, N., Aduda, J., Kaijage, E., & Okiro, K. (2018). The Moderating Effect of Organizational Characteristics on the Relationship Between Budgeting Process and Performance of Churches in Kenya. Journal of Finance and Investment Analysis, 7(2).

    Gatimbu, K. K., & Wabwire, J. M. (2016). Effect of Corporate Environmental Disclosure on Financial Performance of Firms Listed at Nairobi Securities Exchange, Kenya.

    Ghosh, S., Pareek, R., & Sahu, T. N. (2022). The Role of Corporate Governance and Company Specific Characteristics on Environmental Disclosure Practices in India. NMIMS Management Review.

    Hieu, P. D., Thuy, L. T. T., Ngoc, H. T. B., & Lam, N. T. H. (2019). Mandatory Social and Environmental Disclosure of Listed Companies in Vietnam. Academy of Accounting and Financial Studies Journal, 23(5), 1-10.

    Ikpor, I. M., Bracci, E., Kanu, C. I., Ievoli, R., Okezie, B., Mlanga, S., & Ogbaekirigwe, C. (2022). Drivers of sustainability accounting and reporting in emerging economies: evidence from Nigeria. Sustainability, 14(7), 3780.

    Jariya, A. I. (2015). Environmental disclosures in annual reports of Sri Lankan corporate: a content analysis. Journal of emerging trends in economics and management sciences, 6(8), 350-357.

    Jeroh, E. (2020). An assessment of the internal determinants of the environmental disclosure practices of firms across Sub-Saharan Africa. Ekonomski horizonti, 22(1), 47-59.

    Kovács, G. (2022). Stakeholder theory. Handbook of Theories for Purchasing, Supply Chain and Management Research, 310.

    Maulana, B., & Baroroh, N. (2022). The Effect of Industry Type, Company Size, Profitability, Leverage and Environmental Performance on Environmental Disclosure (Empirical Study on PROPER Participating Companies in 20182020). Owner: Riset dan Jurnal Akuntansi, 6(1), 930-939.

    Mgbame, C., Aderin, A., Ohalehi, P., & Chijoke-Mgbame, A. (2020). Achieving sustainability through environmental social governance reporting: overcoming the challenges Environmentalism and NGO accountability (pp. 9-25): Emerald Publishing Limited.

    Mgeni, T., & Nayak, P. (2016). Impact of Structural Firm characteristics on Business Performance of SMEs: Evidence from agribusiness firms in Dar es salaam, Tanzania. Arabian Journal of Business and Management Review, 6(5), 1-8.

    Mohammed, T., & Tamoi, G. (2006). A study of social accounting disclosure in the annual reports of Nigerian companies. Asian Journal of Business Management, 3(3), 145-115.

    Nugroho, P. I., & Arjowo, I. S. (2014). The effects of sustainability report disclosure towards financial performance. International Journal of Business and Management Studies, 3(3), 225-239.

    Nweze, A., & Nwadialor, E. (2020). Effect of social and environmental disclosures on performance of non-financial firms in Nigeria. Journal of Accounting and Financial Management, 6(1), 40-58.

    Orajekwe, J. C., & Ogbodo, C. O. (2023). Firm Attributes and Environmental Disclosure of Energy Corporations in Nigeria. International Journal of Trend in Scientific Research and Development, 7(4), 423-432.

    Ramaiah, T. S., Tiwari, S. C., Sayyad, M., & Mehta, R. (2021). Corporate Environmental Information Disclosure in India: Role of Board Characteristics. PURUSHARTHA-A journal of Management, Ethics and Spirituality, 14(2), 65-73.

    Sulaiman, M., Abdullah, N., & Fatima, A. H. (2014). Determinants of environmental reporting quality in Malaysia. International Journal of Economics, Management and Accounting, 22(1).

    Syukur, A., Novianti, A. S., & Karim, A. (2021). Financial Ratio Analysis of Pt. Semen Tonasa before and After Joining the Semen Indonesia Group. International Journal of Engineering Technology Research & Management, 5(1), 11-17.

    Tukur, S., Shehu, J., Mammadi, A., & Sulaiman, U. A. (2019). An assessment of corporate social responsibility of property developers in Bauchi Metropolis, Nigeria. International Journal of Financial, Accounting, and Management, 1(2), 119-129.

    UN. (2021). COP26: Together for our planet. Retrieved from https://www.un.org/en/climatechange/cop26

    Victor Chiedu, O., & Fodio, M. I. (2012). Board characteristics and the quality of environmental reporting in Nigeria. The journal of accounting and management(2), 33-48.

    Zulfikar, R. (2021). Comparative Study of Environmental Disclosure in Indonesia and Malaysia: Testing Company Characteristics. Jurnal Riset Akuntansi Terpadu, 14(1).

  1. Abubakar, A. A., Moses, S., & Inuwa, M. (2017). Influence of firms attributes on environmental disclosure in listed brewery companies in Nigeria. Civil and Environmental Research, 8(21), 31-35.
  2. Aghdam, S. A. (2015). Determinants of voluntary environmental disclosure: the case of Iran. International Journal of Basic Sciences & Applied Research, 4(6), 343-349.
  3. Agyemang, A. O., Yusheng, K., Twum, A. K., Edziah, B. K., & Ayamba, E. C. (2023). Environmental accounting and performance: empirical evidence from China. Environment, Development and Sustainability, 1-26.
  4. Antara, D., Putri, I., Ratnadi, N. M. D., & Wirawati, N. G. P. (2020). Effect of Firm Size, Leverage, and Environmental Performance on Sustainability Reporting. American Journal of Humanities and Social Sciences Research (AJHSSR), 4(1), 40-46.
  5. Bassey, B. E., Effiok, S. O., & Eton, O. E. (2013). The impact of environmental accounting and reporting on organizational performance of selected oil and gas companies in Niger Delta Region of Nigeria. Research Journal of finance and accounting, 4(3), 57-73.
  6. Brammer, S., & Millington, A. (2006). Firm size, organizational visibility and corporate philanthropy: An empirical analysis. Business Ethics: A European Review, 15(1), 6-18.
  7. Campbell, D. (2003). Intra?and intersectoral effects in environmental disclosures: evidence for legitimacy theory? Business Strategy and the Environment, 12(6), 357-371.
  8. Chukwuebuka, O. J., Obiora, O. O., & Ikechukwu, O. E. (2021). Corporate social responsibility and financial sustainability of oil and gas firms in Nigeria. Asian Journal of Economics, Business and Accounting, 21(19), 46-56.
  9. Dibia, N. O., & Onwuchekwa, J. C. (2015). Determinants of environmental disclosures in Nigeria: A case study of oil and gas companies. International Journal of Finance and Accounting, 4(3), 145-152.
  10. Ezekwesili, T. P., & Ezejiofor, R. A. (2022). Firm characteristics and environmental performance: A study of listed conglomerates in Nigeria. Innovations, 68(1), 69-82.
  11. Fabian, O., & Emeka, O. (2022). Effect of environmental reporting on liquidity of firms in Nigeria. Asian Journal of Advances in Research, 636-646.
  12. Gachoka, N., Aduda, J., Kaijage, E., & Okiro, K. (2018). The Moderating Effect of Organizational Characteristics on the Relationship Between Budgeting Process and Performance of Churches in Kenya. Journal of Finance and Investment Analysis, 7(2).
  13. Gatimbu, K. K., & Wabwire, J. M. (2016). Effect of Corporate Environmental Disclosure on Financial Performance of Firms Listed at Nairobi Securities Exchange, Kenya.
  14. Ghosh, S., Pareek, R., & Sahu, T. N. (2022). The Role of Corporate Governance and Company Specific Characteristics on Environmental Disclosure Practices in India. NMIMS Management Review.
  15. Hieu, P. D., Thuy, L. T. T., Ngoc, H. T. B., & Lam, N. T. H. (2019). Mandatory Social and Environmental Disclosure of Listed Companies in Vietnam. Academy of Accounting and Financial Studies Journal, 23(5), 1-10.
  16. Ikpor, I. M., Bracci, E., Kanu, C. I., Ievoli, R., Okezie, B., Mlanga, S., & Ogbaekirigwe, C. (2022). Drivers of sustainability accounting and reporting in emerging economies: evidence from Nigeria. Sustainability, 14(7), 3780.
  17. Jariya, A. I. (2015). Environmental disclosures in annual reports of Sri Lankan corporate: a content analysis. Journal of emerging trends in economics and management sciences, 6(8), 350-357.
  18. Jeroh, E. (2020). An assessment of the internal determinants of the environmental disclosure practices of firms across Sub-Saharan Africa. Ekonomski horizonti, 22(1), 47-59.
  19. Kovács, G. (2022). Stakeholder theory. Handbook of Theories for Purchasing, Supply Chain and Management Research, 310.
  20. Maulana, B., & Baroroh, N. (2022). The Effect of Industry Type, Company Size, Profitability, Leverage and Environmental Performance on Environmental Disclosure (Empirical Study on PROPER Participating Companies in 20182020). Owner: Riset dan Jurnal Akuntansi, 6(1), 930-939.
  21. Mgbame, C., Aderin, A., Ohalehi, P., & Chijoke-Mgbame, A. (2020). Achieving sustainability through environmental social governance reporting: overcoming the challenges Environmentalism and NGO accountability (pp. 9-25): Emerald Publishing Limited.
  22. Mgeni, T., & Nayak, P. (2016). Impact of Structural Firm characteristics on Business Performance of SMEs: Evidence from agribusiness firms in Dar es salaam, Tanzania. Arabian Journal of Business and Management Review, 6(5), 1-8.
  23. Mohammed, T., & Tamoi, G. (2006). A study of social accounting disclosure in the annual reports of Nigerian companies. Asian Journal of Business Management, 3(3), 145-115.
  24. Nugroho, P. I., & Arjowo, I. S. (2014). The effects of sustainability report disclosure towards financial performance. International Journal of Business and Management Studies, 3(3), 225-239.
  25. Nweze, A., & Nwadialor, E. (2020). Effect of social and environmental disclosures on performance of non-financial firms in Nigeria. Journal of Accounting and Financial Management, 6(1), 40-58.
  26. Orajekwe, J. C., & Ogbodo, C. O. (2023). Firm Attributes and Environmental Disclosure of Energy Corporations in Nigeria. International Journal of Trend in Scientific Research and Development, 7(4), 423-432.
  27. Ramaiah, T. S., Tiwari, S. C., Sayyad, M., & Mehta, R. (2021). Corporate Environmental Information Disclosure in India: Role of Board Characteristics. PURUSHARTHA-A journal of Management, Ethics and Spirituality, 14(2), 65-73.
  28. Sulaiman, M., Abdullah, N., & Fatima, A. H. (2014). Determinants of environmental reporting quality in Malaysia. International Journal of Economics, Management and Accounting, 22(1).
  29. Syukur, A., Novianti, A. S., & Karim, A. (2021). Financial Ratio Analysis of Pt. Semen Tonasa before and After Joining the Semen Indonesia Group. International Journal of Engineering Technology Research & Management, 5(1), 11-17.
  30. Tukur, S., Shehu, J., Mammadi, A., & Sulaiman, U. A. (2019). An assessment of corporate social responsibility of property developers in Bauchi Metropolis, Nigeria. International Journal of Financial, Accounting, and Management, 1(2), 119-129.
  31. UN. (2021). COP26: Together for our planet. Retrieved from https://www.un.org/en/climatechange/cop26
  32. Victor Chiedu, O., & Fodio, M. I. (2012). Board characteristics and the quality of environmental reporting in Nigeria. The journal of accounting and management(2), 33-48.
  33. Zulfikar, R. (2021). Comparative Study of Environmental Disclosure in Indonesia and Malaysia: Testing Company Characteristics. Jurnal Riset Akuntansi Terpadu, 14(1).