IIARD International Institute of Academic Research and Development

INTERNATIONAL JOURNAL OF ECONOMICS AND FINANCIAL MANAGEMENT (IJEFM )

E-ISSN 2545-5966
P-ISSN 2695-1932
VOL. 9 NO. 4 2024
DOI: 10.56201/ijefm.v9.no4.2024.pg41.55

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Environmental Management Cost and Financial Performance of Oil and Gas Firms in Nigeria

Anewe Paulinus Y & Ogbu, Moses Onwe PhD

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Abstract

This study investigated the relationship between environmental management costs and financial performance in the Nigerian oil and gas sector, with a focus on waste management and employee health and safety costs. Employing an ex-post-facto research design and panel least squares regression analysis, data from seven listed oil firms over a ten-year period were analyzed. The findings revealed a significant positive relationship between both waste management and employee health and safety costs with profit after tax, indicating that investments in environmental management positively influence financial performance. Additionally, the study demonstrated that firm size moderates this relationship, suggesting that larger firms may experience diminishing returns on environmental management investments. The study underscored the importance of integrating environmental considerations into business strategies to enhance financial outcomes and promote sustainable operations in the oil and gas industry. Recommendations include increasing investments in environmental management, prioritizing employee health and safety, and tailoring environmental strategies based on firm size.

keywords:

Waste management, Employee health and safety costs, profit after tax, firm size

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