Environmental liabilities have become financially material determinants of industrial value, yet evidence from emerging economies remains conceptually fragmented and empirically under-theorised. Despite Nigeria’s formal adoption of IFRS-based reporting and alignment with the IFRS Sustainability Disclosure Standards (IFRS S1 and S2) and the Global Reporting Initiative (GRI) framework it remains unclear whether environmental obligations are substantively embedded within financial reporting or symbolically disclosed through sustainability narratives. This study advances the literature by distinguishing transparency-oriented disclosure from recognition-based environmental liability accounting grounded in IAS 37. Drawing on an analytical-descriptive design that integrates doctrinal regulatory analysis with qualitative content analysis of annual and sustainability reports of Nigerian listed firms in environmentally sensitive sectors, the study evaluated the extent, measurement depth, and reporting consistency of remediation provisions, decommissioning costs, pollution contingencies, and climate-related obligations. The findings revealed systematic divergence between sustainability disclosure expansion and rigorous financial recognition, characterised by limited quantification, opaque estimation assumptions, and inconsistent integration into core financial statements. The study extends Institutional and Legitimacy Theory by demonstrating how formal convergence with global sustainability standards does not necessarily translate into substantive accounting internalisation under conditions of regulatory fragmentation and enforcement weakness. The study revealed the theoretical gap between symbolic compliance and financial materiality contributed to global debates on sustainability reporting harmonisation and provides evidence-based implications for regulators, standard setters, and investors seeking credible environmental risk pricing in emerging capital markets.