ABSTRACT

The study investigates the effect of environmental cost on firm value and financial performance of listed companies in Nigeria (2012-2018. The study is necessitated in order to resolve conflicting issues on whether the environmental costs significantly impact on the firm value and financial performance. The proxies for environmental costs are Research and Development Cost, Community Development Cost, and Employee Health and Safety Cost. The firm value   proxies are   NAPS, EPS and PER and financial performance proxies are NPM, ROE and ROA. The study uses secondary data sourced from the selected firms’ annual reports and accounts. The researchers adopt descriptive and co relational   research design.  Secondary data collected were analyzed using panel data regression analysis and e-view 9 statistical package. The result on the twenty five (25) firms purposely selected   revealed, among other things, that environmental cost has significant impact on firms value NAPS, while there are no significant impact of environmental cost on  EPS and  PER of listed firms in Nigeria. It also revealed significant  impact of environmental costs on financial performance (NPM, ROA), except on ROE Based on the above results, the study recommends among other things, that  Board of Directors of listed firms in Nigeria should  emphasized on RDC projects    by establishing R&D unit, should take EHSC serious through continuous staff training for better  performance and  there should be collaboration between host communities and listed firms with respect to training and offering scholarships to the youths.   It also recommended   that Directors of listed firms should request for tax incentive if undertaken laudable projects like construction of roads for the host community. It is suggested that if the above recommendations   are taken into consideration, it will go a long way in exposing firms on environmental costs projects that impact on their value and financial performance. Also, it will educate the stakeholders on the expectation from the firms around them .  .