EFFECT OF ENVIRONMENTAL REPORTING ON LIQUIDITY OF FIRMS IN NIGERIA

This study empirically examined the effect of environmental reporting on corporate liquidity in Nigeria. The study’s independent variables include employee health and safety disclosure, pollution control disclosure, and environmental remediation disclosure, which were used as proxies for the environmental reporting, while the dependent variable is company liquidity and was proxy as a current ratio. Three hypotheses were formulated for this study. An ex post facto design was used and the data for the study comes from the published annual financial reports of all 41 companies listed on the sectors of Nigerian Exchange Group ranging from Consumer Goods Sector, Oil & Gas Sector and Industrial Goods Sector, with the data covering the period of 2015-2021. However, the study found that employee health and safety disclosure, pollution control disclosure and environmental remediation disclosure have significant impact on companies’ liquidity proxy, as the current ratio at 1% significant level. On this basis, the study concludes that environmental reporting has positively improved companies’ liquidity over the years. In lieu of the study results, it was recommended that companies disclose more of this information in their annual reports, as the level of disclosure of environmental practices over the years has a significant impact on companies' liquidity.