The consumption of natural resources and incessant emissions of greenhouse gases in Nigeria are on the increase, and stakeholders are agitating increased information on organizations’ interactions with the environment. The study evaluated the relationship between environmental accounting and reporting and sustainability development in Nigeria. Z Test distribution were used for data analyses, and it was discovered that there is a significant relationship between environmental accounting and reporting and sustainable development; that environmental accounting encourage organizations to track their Green House Gases (GHG) emissions and other environmental data against reduction targets, and there are consequences for noncompliance with environmental accounting and reporting. It was recommended that acceptable standard such as International Standard of Accounting Reporting (ISAR) be acknowledged and Graphical indicators be adopted in illustration to users on timely basis whether the organization is performing above, below, or in-line with the targets so that corrective actions can be taken as needed to successfully execute on sustainability initiatives.
Environmental accounting is an inclusive aspect of accounting. It generates reports for both internal use, providing environmental information to help make management decisions on controlling overhead, capital budgeting and pricing, and external use, disclosing environmental information of interest to the government, public and to the financial community. This paper takes into consideration both internal and external uses. Yakhon & Dorweiler (2004) emphasized that the impact of business activity on the environment is found in several forms: air, water, underground pollution, drinking water, land and habitat for endangered and threatened species, oceans, atmosphere, land-mass etc. An array of pollutants, including toxic, hazardous and ‘warming’ is accountable to business activities. They expressed that from this range of environmental impacts, multiple disciplines are needed for analysis of effects, and for integration into management decisions and accounting reporting. Mastrandrea & Schneider (2008) highlighted that industrial revolution has brought economic improvement for most people in industrialized societies. Many enjoy greater prosperity and improved health. They opined that there have been costs, caused by factory pollutant ion that harmed the natural environment. However, the application of machinery and science to agriculture has led to greater land use and therefore, extensive loss of habitant for animals and plants. These factors, in turn, have caused many species to become extinct or endangered.
Nigeria being a developing nation, endowed with abundant natural resources such as petroleum, natural gas, coal, limestone, vegetation etc is not devoid of environmental degradation. The nation, in an attempt to tap these resources to enhance its economic development and well-being of the citizenry invariable finds herself experiencing an array of pollutants including carbon dioxide, warming and other greenhouse emissions.
Akinbami & Adegbulugbe (1998) opined that the use of natural resources including energy is indispensable to economic development and not devoid of environmental consequences astraceable to the environmental degradation and atmospheric pollution experienced in Nigeria.
Beredugo & Mefor (2012) highlighted that Nigeria as a developing country must continue to advance economically and thus requires increased exploitation of natural resources. They buttressed further that there exist a polarity between Nigeria’s GDP and energy consumption, as they are highly correlated. They emphasized that most of the natural resources consumed are nonrenewable and are under threat of depletion, and a persistence consumption of our most valued natural resources in present-day, would compromise the ability of future generations to meet their own needs. Oil exploration and government activities may have reduced the quality and usefulness of life through gas flaring, industrial pollution, oil spillage, deforestation and other related problems.
However, huge amount of income is derived daily by the country from sales of crude oil and its by-products. Therefore, one would generally assume that this money should have significant impact at least on the development of oil and on the mineral producing communities. This should be so because it is on record that the oil and gas industry remains the major income earner (about 90% of the total revenue) for the nation (National Economic Empowerment and Development Strategy (NEEDS, 2004 and Shell, 2000).
Ogbeifun (2007) argues that decades of development have been lost apparently due to slow economic growth, inadequate development plan, and corrupt practices in high places. Again, their per capital income of about $300 a year reveals that the country remains one of the poorest in the world.
In spite of the country’s natural endowments such as vast mangrove forest, wet and fertile lands, serious threats from exploitation of timber, oil spills, gas flaring and the impacts of increasing costal urbanization appear to be posing serious challenges to Nigeria (NEEDS, 2004).
Obemene & Olaoye (2009) pointed out that the haste to develop did not incorporate pollution control and waste management into environmental management plan. Even the environmental laws regarding pollution and waste management seem to be inadequate or where they exist remain to a large extent unenforceable. It is no wonder then, that Ogbeifun (2007) advocates that urgent steps be taken, so that this present generation does not bequeath to her future generation, a downstream sector that is import dependent and dollar driven.
The researcher observes that majority of the people in the country continue to dwell in abject penury, despite the fact that the country is blessed with abundant natural resources which are being harvested on continuing basis by multinational companies and governments.
However, other contending issues that are still being debated are the effects of some environmental accounting issues (which are largely unaccounted for) but have tremendous impact on the economic development of Nigeria. Hence, questions such as what are these environmental accounting issues that should be accounted for in the harvesting of our natural resources, especially in the oil and gas industry? What are the effects of these environmental factors on the economic development and environmental protection of citizens?
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