Environmental Disclosure and Return on Assets of Manufacturing Companies Listed in Nigeria

The return on assets indicator informs existing and potential investors how effectively management has optimally utilized its resources from investments. Studies have advanced that manufacturing companies’ level of commitment has the ability to enhance earnings and corporate return on assets. Lack of optimal utilization of corporate assets and non-compliance with environmental requirements has weakened the earnings of manufacturing companies. Evidence has revealed that not many manufacturing coming have integrated environmental disclosure into their operations. This study examined the effect of environmental disclosure on the return on assets of manufacturing companies listed in Nigeria. The study adopted an ex-post facto research design. The population consisted of the 66 listed manufacturing companies listed on the Nigerian Exchange Group as of December 31, 2021. Purposive sampling was used to select 29 manufacturing businesses. Validated data were taken from the public financial statements of the selected manufacturing enterprises for 16 years (2006-2021). A statutory audit of the financial accounts was used to ensure the data's veracity. Descriptive and inferential (multiple regression) statistics were utilized to assess the data. The study revealed that environmental disclosure affects the return on assets of manufacturing companies listed in Nigeria (Adj.R2 = 0.017, F(5, 458) = 8.333, p < 0.05). The study recommended that managers of manufacturing companies should integrate environmental disclosure as a critical duty as evidence of policies in practice in protecting the environment towards gaining legitimacy and patronage in deepening the return on assets of the companies.