THE EFFECT OF FIRMS’ CHARACTERISTICS AND ENVIRONMENTAL DISCLOSURE IN NIGERIA
CHAPTER ONE
 INTRODUCTION
1.1    BACKGROUND OF THE STUDY
In today’s global economy, environment and sustainability have become an important topic. According to the Oxford Advanced Learner’s Dictionary, an environment is defined as the conditions that affect the behavior and development of somebody or something. Also, according to the Oxford Advanced Learner’s Dictionary, disclosure can be defined as the act of making something known or public that was previously secret or private.    
Influencing the public’s perception towards their operations can be done by companies going through the process of environmental communication. The company attempt to create a positive image (Deegan and Rankin, 1999). Environmental Information (EI) must help the society and firms to recognize the impact on the environment of business decisions (Milne and Patten, 2001; Kuk, G., Fokeer, S., Hung, W., 2005). In making corporate decisions, the environment has to be in view at all times.
The environment plays a major role in influencing organizational activities while organizations also affect the environment they operate in either positively or negatively. However, from our opinion, environmental disclosure can be defined as how activities of organizations affect their environment. This could be positive or negative. Over the last two decades, environmental disclosure by corporations has been increasing steadily in both size and complexity (Smith, 2003). In this area of corporate reporting which appears to lie outside the domains of accounting disclosures, research attention has attempted to understand and explain it over the years. According to Deegan and Rankin (1996), corporate environmental reporting refers to the behavior and attitude of a company towards relating or communicating the environment effects of its activities to particular interest groups within society and to the society at large.
In the developing countries, and Nigeria in particular, research previously conducted has shown that as a result of non-availability of either local or international standards to guide disclosure, environmental accounting disclosure are voluntary. In conforming to industry practices, pressures from environmental activist and advocates, relationship with parent company (Multi-National Corporations), ownership structure of the company, size and level of profitability etc have to be looked at properly.
A new study shows that disclosing information regarding environmental practices may be more beneficial to a company’s reputation than their actual environmentally friendly performance. Researchers also warn that this unexpected benefit of information disclosure may reduce a corporation’s incentive to improve environmental performance in the future.
However, there is a context of the stakeholder-shareholder debate. From the “shareholder perspective”, the only responsibility of managers is meeting their interest. Meanwhile from the “stakeholder perspective”, other groups or constituents are affected by a company’s activity (such as the employees or the local community) and have to be considered in managers’ decisions, possibly equal with shareholders (Ndukwe O. Dibia & John Chika Onwuchekwa, 2015).
Fifka (2013) mentioned that a large number of research paid special attention to the factors that affected the responsibility reporting of both internal and external factors. Synthesis of more than 40 countries (186 individual research results) proved that company size, type of industry, financial performance, social and environmental performance and managerial attitude (internal factors) are factors that are more associated with social responsibility disclosure. Besides, social responsibility and environmental disclosure are also linked to external factors including the State and media pressure.
1.2    STATEMENT OF THE RESEARCH PROBLEM
Research previously conducted has shown that environmental disclosure of organizations have become voluntary due to the non-availability of local or international standard to govern the act of environmental disclosure. Other problems of environmental disclosure include:
Organizations do not have the same reason for disclosure. The certainty of knowing if an organization discloses properly cannot be ascertained because each organization have different determinants.  
1.2.1    RESEARH QUESTIONS
    Is there a relationship between:
1.         leverage and environmental disclosure in Nigeria?
2.         firm size and environmental disclosure in Nigeria?
3.         profitability and environmental disclosure in Nigeria?
4.         tax rate and environmental disclosure in Nigeria?
5.    age and environmental disclosure in Nigeria?
1.3OBJECTIVES OF THE STUDY
The main objective of this study is to examine environmental disclosure and its determinants in Nigeria. Specific objectives of this study include ascertaining if there is a relationship between:
leverage and environmental disclosure in Nigeria.
firm size and environmental disclosure in Nigeria.
profitability and environmental disclosure in Nigeria.
tax rate and environmental disclosure in Nigeria.
age and environmental disclosure in Nigeria.  
1.4RESEARCH HYPOTHESES
 The research hypothesis is stated in the null form. There is no relationship between:
1.          leverage and environmental disclosure in Nigeria.
2.          firm size and environmental disclosure in Nigeria.
3.          profitability and environmental disclosure in Nigeria.
4.          tax rate and environmental disclosure in Nigeria.
5.    age and environmental disclosure in Nigeria.
1.5     SCOPE OF THE STUDY
This study is empirical in nature and it basically looked at the corporate environmental disclosure practice among firms listed in Nigerian manufacturing industry. However, in other to achieve the objectives outlined in the study, the corporate annual report for ten manufacturing companies listed in the Nigerian stock exchange for the years 2012-2015 was examined. The choice of these companies arises based on their nature of production, the level of industrial operations and most importantly the market capitalization of the selected companies.
1.6    SIGNIFICANCE OF STUDY
This study will give various insights to environmental disclosures in Nigeria through the process of examining different determinants such as leverage, company size, profitability, tax rate, age of company, financial performance, social and environmental performance and managerial attitude in organizations. The study will examine and compare the determinants of environmental disclosures in different Nigerian manufacturing companies.
This study will therefore be of immense benefits to government, organizations, entrepreneurs, students and the entire society.
REFERENCES
Deegan, C., & Rankin, M. (1996). ‘Do Australian companies report environmental news objectively? An analysis of environmental disclosure by firms prosecuted successfully by the environmental protection authority’. Accounting, Auditing and Accountability Journal, 9(2), 52-69.
Deegan, C. & Rankin, M. (1999). The environmental reporting expectations gap: Australian evidence. British Accounting Review 31, 313-346.
Kuk, G., Fokeer, S., Hung, W. (2005). Strategic formulation and communication of corporate environmental policy statements: UK firms’ perspective. Journal of Business Ethics, 58, 375-385.
Milne, M., Patten, D. (2001). Securing organizational legitimacy: an experimental decision case examining the impact of ED. APIRA Conference, 1-44.
Ndukwe, O. Dibia, John Chika Onwuchekwa (2015). Determinants of environmental disclosure in Nigeria; a case study of Oil and Gas companies. International Journal of Finance and Accounting, 4(3), 145-152.
The Oxford Advanced Learner’s Dictionary, 7th Edition, 415-490.

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