Green Financing: Firm Financial Performance and Environmental Sensitivity of Consumer Goods Firms in Nigeria

Abstract

The main objective of the study is to examine the effect of financial structure on environmental sensitivity of consumer goods firms in Nigeria. The specific objectives are to ascertain the effect of profitability, liquidity and growth of an environmental consciousness of consumer goods firms in Nigeria. The sensitivity index is measured by the number of counts on environmental consciousness in the firms’ financial statement as published. The study adopted the ex-post facto research designs, employing secondary data obtained from the published financial statement of the companies. The hausman test was used to make a choice between the random effect and fixed effect as deemed appropriate. The ordinary least square (OLS) regression analysis was used to analyze the data. The study found that profitability had positive and insignificant effect, liquidity and growth had negative and insignificant effect on environmental sensitivity of consumer goods firms in Nigeria. The study concludes that although the firms’ sensitivity matrix is driven positively by profitability, liquidity and growth exerted negative and insignificant effect. It is therefore recommended that the environmental consciousness of the consumer goods firms should be directed toward providing environmental safety, provision of clean and healthy water, construction and desilting of drainage, installation of devices to control pollution and regular evacuation of waste, build clinics to provide healthy living condition for staff and the communities in which the companies operate.