The effect of environmental compliance on financial performance : a survey of listed manufacturing firms in Tanzania

Abstract

There has been environmental pollution across the globe. Environmental activist have condemned manufacturing firms of environmental pollution. This has led to the establishment of various environmental regulations and standards. However the effect of compliance to environmental regulations on the financial performance is not clearly known. This study explores the effects of environmental compliance on the financial performance for listed manufacturing firms in Tanzania. Five listed manufacturing companies were surveyed to obtain data used for the purpose this study. Specifically, the study intended to establish: the extent of environmental compliance by listed manufacturing firms in Tanzania, the relationship between environmental compliance and financial performance and the effect of environmental compliance on the financial performance. Regression analysis was done to establish the relationship between environmental compliance and financial performance. Interviews were conducted to find out the extent of environmental compliance by the listed manufacturing firms. Findings are summarized and presented in term of tables and figures. The findings suggest that there is no significant relationship between environmental compliance and financial performance among listed manufacturing firms in Tanzania; the extent of environmental compliance by listed manufacturing firms in Tanzania is not clear. This study concludes that the argument that environmental compliance has no significant effect on the financial performance for listed manufacturing firms in Tanzania.