IIARD International Institute of Academic Research and Development

JOURNAL OF PUBLIC ADMINISTRATION AND SOCIAL WELFARE RESEARCH (JPASWR )

E-ISSN 2504-3597
P-ISSN 2695-2440
VOL. 10 NO. 5 2025
DOI: 10.56201/jpaswr.v10.no5.2025.pg62.74

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Balancing Green Commitment and Financial Obligations: Environmental Responsibility Cost and Bank Equity Capital

Confidence, Joel Ihenyen PhD, Perelayefa, George Owota PhD, Christiana, Olufunke, Porbeni, S

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Abstract

This study examined the effect of environmental responsibility costs, specifically community development expenditure, on the equity capital of banks listed on the Nigerian Exchange Group (NGX), while controlling for firm size. Using panel data from 13 banks over the period 2014 to 2023, the study employed panel least squares regression to assess how green commitments impact banks’ financial obligations, measured by equity financing. Results showed that community development expenditure positively and significantly affected equity capital, with a coefficient of 0.025 (p = 0.012). Conversely, firm size had a significant negative effect (coefficient = -0.088, p = 0.004), suggesting that larger banks tend to rely less on equity financing despite their environmental responsibility efforts. These findings include that banks’ investments in environmental and community development initiatives can strengthen their equity capital, helping to balance green commitment with financial obligations. The study recommends that banks intensify their environmental responsibility expenditures as a strategic approach to improving equity financing and that policymakers develop frameworks encouraging sustainable financing practices aligned with green commitments.

keywords:

Environmental responsibility, Equity Capital, Firm Size, Financial Obligations

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