Environmental Mitigation Financing and Financial Efficiency of Listed Industrial Goods Firms in Nigeria

Abstract

This study investigated the effect of environmental mitigation financing on financial efficiency of listed industrial goods firms in Nigeria. Financial efficiency is measured using Economic Value Added, while environmental mitigation financing is proxied by green loan financing, pollution control investment, renewable energy investment, and environmental remediation and clean-up cost. An ex post facto research design was adopted using a balanced panel of 11 industrial goods firms listed on the Nigerian Exchange Group over the period 2015 to 2024. Secondary data were sourced from audited annual reports, sustainability disclosures, and exchange filings, and analysed using panel regression techniques with robust standard errors. The results indicated that green loan financing has a negative but statistically insignificant effect on financial efficiency, suggesting that access to green credit alone does not guarantee value creation. Pollution control investment showed a negative and significant effect on Economic Value Added, reflecting short term cost pressures associated with compliance driven environmental expenditure. In contrast, renewable energy investment exerted a strong positive and significant influence on financial efficiency, while environmental remediation and clean-up cost also recorded a positive and significant effect, indicating that proactive environmental actions enhance operational efficiency and stakeholder confidence. Based on these findings, the study recommended that industrial goods firms prioritise strategic environmental investments, particularly renewable energy initiatives, integrate environmental remediation into core operational planning, and evaluate pollution control expenditures using value-based performance measures. Policymakers and financial institutions were also encouraged to strengthen green finance frameworks by linking funding access to measurable efficiency outcomes.