Thesis Abstract

Environmental costs comprise both internal and external costs of environmental degradation due to industrial activities. The internal costs includes; pollution costs, costs for prevention and control, waste disposal, effluent control technologies, treatment, sanitation and clean up expenditure, material purchase value of non-product output, planning, shifting actions and damage repairs that can occur at companies and affect governments or people. While the external costs are; contaminated sites, fine and penalties, costs of regulatory compliance, legal costs, fumigation to reduce bacteria effects, damage to the corporate image and environmental liabilities. This study aimed at determining the influence of these environmental costs on the performance of Nestle Nigeria Plc, GlaxoSmithKline Nigeria Plc, Guinness Plc, Unilever Nigeria Plc and Nigerian Breweries Plc. The objective of this study is to assess environmental costs influence on profit indicators (Return of Capital Employed, Net profit Margin, Earning per Share and Dividend per Share) of the sampled Companies. The study made use of an exploratory research design. A sample of five companies were selected from a population of 22 manufacturing companies quoted on the Nigerian Stock Exchange using judgmental sampling technique. Data was collected through secondary source from published annual financial reports (2005 – 2014), which was analyzed using the Ordinary Least Square (OLS) method with the help of E-view version 3.1. The study revealed that Environmental costs have a negative but insignificant effect on ROCE and EPS, and positive but not statistically significant on NPM and DPS. The study concluded that environmental costs can be offset in generating revenue through the sales of waste, by products, recycling of waste, grant of subsidies, tax crredits, financial/non financial awards. Also, accounting for environmental cost and performance can support an organizations development and increase firms profitability and operations in an overall Environmental Management System (EMS). It was recommended that Government, Financial and Regulatory Bodies should make Environmental Reporting in Annual Reports compulsory and Government Agencies should give tax credit, subsidies and financial/non financial awards to organizations that comply with its environmental laws of the land which will encourage environmental reporting.

Thesis Overview