Assessment of Environmental Cost Internalisation as Determinants of Sustainable Environmental Behaviour among SMEs in Lagos, Nigeria

Oluwole, Ebenezer, Adegboyega and Ogunjobi, Joseph Olufemi and Awe, Abel Ariyo and Ogunlowo, Daniel T. Assessment of Environmental Cost Internalisation as Determinants of Sustainable Environmental Behaviour among SMEs in Lagos, Nigeria. Journal of Science and Technology. ISSN 2734-2352

	Text 185 ENVIRMTAL JOURNAL.pdf Download (291kB)
	Text 185 ENVIRMTAL JOURNAL.pdf Download (291kB)

Abstract

Abstract - This study examines the role of environmental cost internalisation (ECI) as a determinant of sustainable environmental behaviour (SSEB) among small and medium enterprises (SMEs) in Lagos, Nigeria. SMEs play a critical role in economic development and contribute significantly to environmental degradation. Effective internalisation of environmental costs, such as the cost of compliance, the cost of pollution, and environmental resource damage, are determinant of sustainable environmental behaviour among SMEs. Using Partial Least Squares Structural Equation Modelling (PLS-SEM), data from 521 SMEs were analysed to determine the direct effects of ECI on SSEB. This study empirically analyses how ECI influences SMEs' sustainability practices, and the findings show that the model explains a substantial portion of the variance in SSEB (73.1%). The path coefficient from CCOMP to SSEB (0.751) indicates a strong relationship. Similarly, the path coefficient from CPOLU to SSEB (0.014) is very small and suggests a negligible relationship, while the path from ERDAM to SSEB (0.132), indicates a moderate effect. The study revealed that ECI has a significant positive impact on SSEB, showing that the cost of compliance, the cost of pollution, and environmental resource damage are determinants of sustainable SMEs' environmental behaviour in Lagos state. In contrast, the cost of pollution was found to be statistically insignificant. The study concludes that CCOMP, CPOLU, and ERADAM are determinants of sustainable SMEs' environmental behaviour in Lagos state.Training and capacity-building programs should be introduced to help SMEs internalize environmental costs and improve their sustainability performance.

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