ENVIRONMENTAL REPORTING AND FINANCIAL PERFORMANCE OF DEPOSIT MONEY BANKS IN NIGERIA: THE MEDIATING PERSPECTIVE OF INVESTMENT

This study examined the mediating effect of investment on the relationship between environmental reporting and the financial performance of Deposit Money Banks listed on the Nigeria Exchange Group. The exogenous variable was environmental reporting measured as total expenditure on water, materials, waste management, and emission control while the dependent variable was financial performance proxied by earnings per share. The mediating variable was investment measured as the number of shareholders in a year. Data were collected from annual reports of 14 Deposit Money Banks (DMB) listed on the Nigeria Exchange Group. The structural equation model was used as a major technique of data analysis. The structural relationships between the variables were estimated in conjunction with the direct, indirect, and total effects to ascertain the effect of investment as a mediator on the relationship between environmental reporting and firm financial performance. Findings revealed that investment had a significant mediating effect on the relationship between environmental reporting and the financial performance of Deposit Money Banks listed on the Nigeria Exchange Group. It was recommended that environmental reporting activity is an expenditure but since it has been mediated by investment to have a positive and significant effect on banks' financial performance, DMBs should continue with environmental reporting activities on water, materials, waste management and emission control as this may enhance performance through the attraction of more investors and also maintain a green work environment.