ENVIRONMENTAL REPORTING DISCLOSURE AND FINANCIAL PERFORMANCE: EVIDENCE FROM LISTED OIL AND GAS COMPANIES IN NIGERIA
Abstract
This study examines the effect of environmental reporting disclosure on the financial performance of listed oil and gas companies in Nigeria. Specifically, it evaluates the influence of emission and energy disclosure, effluents and waste disclosure, and compliance with environmental laws and regulations on firm performance measured by return on assets (ROA) and return on equity (ROE). An ex-post facto research design was adopted using panel data obtained from the annual reports and Nigerian Exchange Group fact books of seven listed oil and gas firms for the period 2014–2023. The data were analysed using Panel Least Squares and Huber Robust regression techniques. The findings indicate that emission and energy disclosure has a significant negative effect on ROA and ROE, suggesting that environmental compliance costs may reduce short-term profitability. Compliance with environmental regulations shows a positive and significant effect on ROA, while effluents and waste disclosure has no significant effect on financial performance. The study concludes that although environmental disclosure enhances corporate legitimacy and sustainability, it may exert short-term financial pressure on firms. The study recommends improved cost-efficient environmental strategies and stronger regulatory frameworks to promote transparent and timely environmental reporting in the Nigerian oil and gas sector.
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Published in Wellspring University Journal of Social and Management Sciences
ISSN: 2616-1296
This article appears in our peer-reviewed academic journal
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