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THE CONCEPT OF GREEN ACCOUNTING IN NIGERIA  (A CASE STUDY OF CHEVRON)

ABSTRACT

The study examined the concept of green accounting in Nigeria. The specific objectives were to determine the effect of: environmental cost accounting and green management accounting on the financial performance of oil and gas companies in Nigeria. A quantitative technique was adopted, and Ex post facto research design was employed for the study. Data were obtained from annual reports and accounts of the companies for the periods 2010 to 2020. The hypotheses were tested using regression analysis with aid of e-view 9.0. The results showed that environmental cost accounting has a significant effect on the financial performance of oil and gas companies. Also, the study found that green management accounting has significant effect on the financial performance of oil and gas firms. Therefore, the paper recommended that management of oil and gas companies in Nigeria should pay particular attention to environmental cost accounting to enhance the firm’s operating environment and the financial performance of the companies. Also, since most oil and gas companies hardly report their environmental activities, the government should make environmental reporting in annual reports compulsory thereby passing legislation which will compel companies to integrate environmental issues into their strategic planning process; and the publication of environmental accounting standards both locally and internationally which can be reviewed continually to ensure dynamism in compliance.

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The evolution of green accounting was to provide for the accurate information in the firm’s annual report regarding the cost incurred in environmental activities and how many deliberate intervention costs have been incurred in order to bridge the gap between marginal social and private costs. The fact that many firms engage in production and manufacturing activities are faced with cost emanating from environmental pollution and degradation, it is essential these firms develop green-cost responsiveness, by disclosing such green costs in their annual reports and accounts (Hoje, Kim & Park, 2014; Ezejiofor, Racheal & Chigbo, 2016). When firms disclose their green costs, it is believed it makes the firm responsive (Shelly, Fust & Lisa, 2007; Cortez & Cudia, 2011; Muller, Mendelsohn & Nordhaus, 2011); The firm has the option to minimize its costs in the medium- and long-term (Hasan & Hakan, 2012), and it is also the fundamental determinant of profitability/performance (Lee, Pati & Roh, 2011; Okoye & Ezejiofor, 2013; Jeroh & Okoro, 2016). Also, firms in the non-consumer goods sub-sector cause a lot of environmental problems. Hence, these firms are expected to be green accounting responsive. The study seeks to appraise the concept of green accounting in Nigeria. A case study of chevron.

1.2 STATEMENT OF THE PROBLEM

The operations of many firms has led to the degradation of the environment and in spite of the provisions of laws and regulations to protect the environment from harmful effects and for the compensation of the affected communities, many firms are yet to comply. According to D. E. Emeakponuzo and M. Udih (2015), the problems of non- observance of green accounting in Nigeria is associated with lack of suitable technology and regulatory framework, infrastructure deficiencies, high level of corruption and the absence of appropriate green accounting models or techniques. The problem confronting the study is to appraise the concept of green accounting in Nigeria. A case study of chevron.

1.3 OBJECTIVES   OF THE STUDY

The Main Objective of the study is to appraise the concept of green accounting in Nigeria. A case study of chevron; The specific objectives include:

1.            To determine the nature and concept of green accounting.

2.            To appraise the relevance of green accounting in Nigeria.

3.            To proffer an analysis of the effect of green accounting in chevron.

1.4 RESEARCH QUESTIONS

1.            What is the nature and concept of green accounting?

2.            What is the relevance of green accounting in Nigeria?

3.            What is the effect of green accounting in chevron?

1.5 STATEMENT OF THE HYPOTHESES

The statement of the hypotheses for the study is stated in Null as follows:

Ho1: The observance of green accounting in chevron is low.

Ho2: The effect of green accounting in chevron is low.

1.6 SIGNIFICANCE OF THE STUDY

The study provides an understanding and relevance of green accounting in contemporary society. 

1.7 SCOPE OF THE STUDY

The study focuses on the appraisal of the concept of green accounting in Nigeria. A case study of chevron.

1.8 LIMITATION OF THE STUDY

The study was confronted with logistics and geographical factors.

1.9 DEFINITION OF TERMS

GREEN ACCOUNTING DEFINED

The evolution of green accounting was to provide for the accurate information in the firm’s annual report regarding the cost incurred in environmental activities and how many deliberate intervention costs have been incurred in order to bridge the gap between marginal social and private costs. 

INCOME DEFINED

Income is defined as income earned by an individual.

SAVINGS DEFINED

Savings constitutes that amount of money set aside for future use rather than money spent immediately.

HOUSEHOLD DEFINED

These are persons or group of persons, living together in the same house hold unit.

ACCOUNTING DEFINED

Accounting is defined as the recording of financial transactions and the storing, sorting, retrieving, summarizing, and presenting the results in various reports and analysis.

FINANCIAL ACCOUNTING DEFINED

The aspect of accounting required by outside users such as  balance sheet, income statement, etc.

MANAGEMENT ACCOUNTING DEFINED

These are the accounting information meant for the management of the firm for controlling purpose and decision making of things which affect the firm as a whole. Such as budgets, standards for controlling operations, and estimating selling prices.

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