Influence of Environmental Costs on the Performance of Some Selected Quoted Manufacturing Companies in Nigeria.
ABSTRACT
Environmental costs comprise both internal and external costs of environmental degradation due to industrial activities.
The internal costs include; pollution costs, costs for prevention and control, waste disposal, effluent control technologies, treatment,
sanitation and clean up expenditure, material purchase value of non-product output, planning, shifting actions and damage repairs that can occur at companies and affect governments or people.
While the external costs are; contaminated sites, fine and penalties, costs of regulatory compliance, legal costs, fumigation to reduce bacteria effects, damage to the corporate image and environmental liabilities.
This study aimed at determining the influence of these environmental costs on the performance of Nestle Nigeria Plc, GlaxoSmithKline Nigeria Plc, Guinness Plc, Unilever Nigeria Plc and Nigerian Breweries Plc.
The objective of this study is to assess environmental costs influence on profit indicators (Return of Capital Employed, Net profit Margin, Earning per Share and Dividend per Share) of the sampled Companies.
INTRODUCTION
Most environmental degradations and emissions are anthropogenic, an advent traceable to the industrial revolution of late 18th century where economic activities in many communities moved from agriculture to manufacturing
(Gray & Babington, 2001) as cited in (Papang, Bassey & Bessong, 2012). Production shifted from its traditional locations in the home and the small workshop to factories.
The overall amount of goods and services produced expanded dramatically, new groups of investors, business people, and managers took financial risks and reaped great rewards (Lamberton, 2005) as cited in (Bassey, Sunday & Okon, 2013).
In the long run the industrial revolution has brought economic improvement for most people in industrialized countries.
Many enjoy greater prosperity and improved health. There have been costs; however, because industrialization has brought environment pollutants and greater land use, which have harmed the natural environment (Mastrandrea & Schneider, 2008) as cited in (Makori & Jagongo, 2013).
The ultimate disposal of the waste led to environmental pollution in many parts of the world, the magnitude of pollution of the environment has already reached an alarming level (Pramanil, Shil & Das, 2007).
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