Accounting for Green Cost Implication on the Financial Performance of Listed Manufacturing Firms in Nigeria
Year: 2026
Type: article
Abstract: The costs incurred to acquire green technology or install pollution-abatement facilities usually translate into direct, indirect, or operating expenses. This study examined the effect of green cost accounting practices specifically clean technology adoption, pollution control, and recycling costs on the financial performance of Nigerian listed manufacturing firms. An ex-post facto research design was employed to analyse data from a random sample of 47 firms listed on the Nigerian Exchange Group (NGX) as of December 31st, 2024. Descriptive and inferential statistics, including linear regression, were applied. Findings revealed that the coefficient of clean technology adoption cost was 0.2108, indicating a positive relationship with return on assets (ROA). Thus, a unit increase in clean technology adoption cost raised ROA by 0.2108 units. However, this effect was statistically insignificant (P=0.4393>0.05). The coefficient of pollution control cost was -0.0746, suggesting a weak negative relationship with ROA. A unit increase in pollution control cost reduced ROA by 0.0746 units, though this effect was also insignificant (P=0.8165>0.05). Similarly, the coefficient for recycling cost was 0.3630, reflecting a positive association with ROA, where a unit increase raised ROA by 0.3630 units. Yet, this relationship too was insignificant (P=0.8165>0.05).The study concludes that investments in green initiatives may not yield immediate financial returns for Nigerian manufacturing firms. Policymakers are therefore encouraged to design supportive policies and provide financial incentives to enhance the financial viability of adopting green practices.
Institutions: Afe Babalola University, Adekunle Ajasin University
Language: English
Subfield: Marketing
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W7214101284