Corporate environmental disclosure entails reporting on the impact of company activities on the natural environment such as waste management, recycling, carbon management, emission, pollution, wetland and wildlife conservation. Conventional accounting systems are limiting since they fail to directly address sustainability concerns. They have failed to address economic growth against social and environmental needs in order to balance the different needs of various stakeholders. Sustainability has become a major pillar of today’s business activities. This study consequently aimed at assessing the effect of corporate environmental disclosure on financial performance of listed firms at the Nairobi Securities Exchange, Kenya. This study made use of longitudinal secondary data from the annual reports and financial statements of listed companies at the Nairobi Securities Exchange. Content analysis of sampled listed companies’ annual reports was undertaken to examine environmental disclosure practices. A checklist of environmental disclosure items and categories was developed and environmental disclosure indices computed. Casual research design was employed to determine the cause-effect relationship between corporate environmental Disclosure and financial performance. Target population of the study was 61 listed companies. Purposive sampling was employed in selecting firms that have been listed for entire period of study and whose annual reports are available at the Nairobi Securities Exchange. This resulted into a sample size of 32 listed companies. Coefficient of Skewness was used to test the normality of data. Homoscedasticity and auto-correlation assumptions of the regression model were tested using scatter plots and Durbin Watson test. Linear regression model was used to determine the casual relationship between environmental disclosure and financial performance. The overall model was found to be significant with F=8.514, P-value <0.05. The predictor variable explained 47.7% of changes in financial performance. Firm size and leverage have no effect on environmental disclosure. Findings reveal that environmental disclosure with P-value <0.05 has a positive significant effect in the mean financial performance. The study recommends that firms should engage in environmental disclosure because it leads to increased financial performance. The study would be useful to the government and also managers to ensure policies are put in place to ensure present generations meet their needs without compromising the ability of future generations to meet theirs. The study also forms basis for further research and adds knowledge to existing body.
| Published in | International Journal of Sustainability Management and Information Technologies (Volume 2, Issue 1) |
| DOI | 10.11648/j.ijsmit.20160201.11 |
| Page(s) | 1-6 |
| Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
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Copyright © The Author(s), 2016. Published by Science Publishing Group |
Corporate Environmental Disclosure, Financial Performance, NSE, Kenya
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APA Style
Karambu Kiende Gatimbu, Joseph Masinde Wabwire. (2016). Effect of Corporate Environmental Disclosure on Financial Performance of Firms Listed at Nairobi Securities Exchange, Kenya. International Journal of Sustainability Management and Information Technologies, 2(1), 1-6. https://doi.org/10.11648/j.ijsmit.20160201.11
ACS Style
Karambu Kiende Gatimbu; Joseph Masinde Wabwire. Effect of Corporate Environmental Disclosure on Financial Performance of Firms Listed at Nairobi Securities Exchange, Kenya. Int. J. Sustain. Manag. Inf. Technol. 2016, 2(1), 1-6. doi: 10.11648/j.ijsmit.20160201.11
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Download@article{10.11648/j.ijsmit.20160201.11,
author = {Karambu Kiende Gatimbu and Joseph Masinde Wabwire},
title = {Effect of Corporate Environmental Disclosure on Financial Performance of Firms Listed at Nairobi Securities Exchange, Kenya},
journal = {International Journal of Sustainability Management and Information Technologies},
volume = {2},
number = {1},
pages = {1-6},
doi = {10.11648/j.ijsmit.20160201.11},
url = {https://doi.org/10.11648/j.ijsmit.20160201.11},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijsmit.20160201.11},
abstract = {Corporate environmental disclosure entails reporting on the impact of company activities on the natural environment such as waste management, recycling, carbon management, emission, pollution, wetland and wildlife conservation. Conventional accounting systems are limiting since they fail to directly address sustainability concerns. They have failed to address economic growth against social and environmental needs in order to balance the different needs of various stakeholders. Sustainability has become a major pillar of today’s business activities. This study consequently aimed at assessing the effect of corporate environmental disclosure on financial performance of listed firms at the Nairobi Securities Exchange, Kenya. This study made use of longitudinal secondary data from the annual reports and financial statements of listed companies at the Nairobi Securities Exchange. Content analysis of sampled listed companies’ annual reports was undertaken to examine environmental disclosure practices. A checklist of environmental disclosure items and categories was developed and environmental disclosure indices computed. Casual research design was employed to determine the cause-effect relationship between corporate environmental Disclosure and financial performance. Target population of the study was 61 listed companies. Purposive sampling was employed in selecting firms that have been listed for entire period of study and whose annual reports are available at the Nairobi Securities Exchange. This resulted into a sample size of 32 listed companies. Coefficient of Skewness was used to test the normality of data. Homoscedasticity and auto-correlation assumptions of the regression model were tested using scatter plots and Durbin Watson test. Linear regression model was used to determine the casual relationship between environmental disclosure and financial performance. The overall model was found to be significant with F=8.514, P-value <0.05. The predictor variable explained 47.7% of changes in financial performance. Firm size and leverage have no effect on environmental disclosure. Findings reveal that environmental disclosure with P-value <0.05 has a positive significant effect in the mean financial performance. The study recommends that firms should engage in environmental disclosure because it leads to increased financial performance. The study would be useful to the government and also managers to ensure policies are put in place to ensure present generations meet their needs without compromising the ability of future generations to meet theirs. The study also forms basis for further research and adds knowledge to existing body.},
year = {2016}
}
TY - JOUR T1 - Effect of Corporate Environmental Disclosure on Financial Performance of Firms Listed at Nairobi Securities Exchange, Kenya AU - Karambu Kiende Gatimbu AU - Joseph Masinde Wabwire Y1 - 2016/08/01 PY - 2016 N1 - https://doi.org/10.11648/j.ijsmit.20160201.11 DO - 10.11648/j.ijsmit.20160201.11 T2 - International Journal of Sustainability Management and Information Technologies JF - International Journal of Sustainability Management and Information Technologies JO - International Journal of Sustainability Management and Information Technologies SP - 1 EP - 6 PB - Science Publishing Group SN - 2575-5110 UR - https://doi.org/10.11648/j.ijsmit.20160201.11 AB - Corporate environmental disclosure entails reporting on the impact of company activities on the natural environment such as waste management, recycling, carbon management, emission, pollution, wetland and wildlife conservation. Conventional accounting systems are limiting since they fail to directly address sustainability concerns. They have failed to address economic growth against social and environmental needs in order to balance the different needs of various stakeholders. Sustainability has become a major pillar of today’s business activities. This study consequently aimed at assessing the effect of corporate environmental disclosure on financial performance of listed firms at the Nairobi Securities Exchange, Kenya. This study made use of longitudinal secondary data from the annual reports and financial statements of listed companies at the Nairobi Securities Exchange. Content analysis of sampled listed companies’ annual reports was undertaken to examine environmental disclosure practices. A checklist of environmental disclosure items and categories was developed and environmental disclosure indices computed. Casual research design was employed to determine the cause-effect relationship between corporate environmental Disclosure and financial performance. Target population of the study was 61 listed companies. Purposive sampling was employed in selecting firms that have been listed for entire period of study and whose annual reports are available at the Nairobi Securities Exchange. This resulted into a sample size of 32 listed companies. Coefficient of Skewness was used to test the normality of data. Homoscedasticity and auto-correlation assumptions of the regression model were tested using scatter plots and Durbin Watson test. Linear regression model was used to determine the casual relationship between environmental disclosure and financial performance. The overall model was found to be significant with F=8.514, P-value <0.05. The predictor variable explained 47.7% of changes in financial performance. Firm size and leverage have no effect on environmental disclosure. Findings reveal that environmental disclosure with P-value <0.05 has a positive significant effect in the mean financial performance. The study recommends that firms should engage in environmental disclosure because it leads to increased financial performance. The study would be useful to the government and also managers to ensure policies are put in place to ensure present generations meet their needs without compromising the ability of future generations to meet theirs. The study also forms basis for further research and adds knowledge to existing body. VL - 2 IS - 1 ER -
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