Submit your papersSubmit Now
For Enquiries: [email protected]
IIARD LogoIIARD

Environmental Costs and Financial Performance of Quoted Oil and Gas Companies in Nigeria

Akpobulokemi Oyinpreye Godgift, Emmanuel O Korolo

Abstract

This study examines the environmental costs and financial performance of quoted oil and gas companies in Nigeria. The study aimed to investigate the impact of environmental costs on Earnings Per Share, Dividend Per Share, Net Profit Margin, and Return on Capital Employed regarding the ecological costs of the quoted companies examined. The study employed an ex post facto research design, anchored on Stakeholders' Theory. It adopted a purposeful sampling method to select (10) Ten Listed Oil and Gas Firms out of (12) Twelve Firms. The study covers fourteen (14) periods of annual reports of the companies under study, covering the period from 2010 to 2023. Descriptive and inferential statistics, plus multiple Regression models, were used to analyze the data collected from the annual reports of the companies. The results and the findings show that there is highly negligible impact of environmental costs and financial performance in the companies studied. The study therefore recommends that the companies search for other factors that account for high cost and think of how to tackle them towards profitability. New technological approaches to cost reduction should be applied in the normal discharge of management functions geared towards improving financial performance.

References

Adediran, S. A., & Alade, S. O. (2019). The impact of environmental accounting on corporate performance in Nigeria. European Journal of Business and Management, 5(23), 141–144. Ahmad, A. (2019). Environmental accounting & reporting practices: Significance and issues—A case from Bangladeshi companies. Global Journal of Management and Business Research, 12(14), 1–21. Aggarwal, P. (2019). Impact of sustainability performance of a company on its financial performance: A study of listed Indian companies. Global Journal of Management and Business Research: Finance, 13(11), 6169–6181. Akabom, I. A. (2021). Environmentally friendly policies and their financial effects on the corporate performance of selected oil and gas companies in the Niger Delta, Nigeria. American International Journal of Contemporary Research, 2(1), 168–173. Aondoakaa, K. (2022). Impact of sustainability reporting on corporate performance of selected quoted companies in Nigeria [Unpublished manuscript]. Ayoib, C. A., Nosakhare, P. O., & Chijoke, O. M. (2021). Environmental accounting and firm profitability in Nigeria: Do firm-specific effects matter? Global Journal of Management and Business Research: Finance, 13(11), 61–69. Bassey, E. B., & Sunday, O. E. (2019). The impact of environmental accounting and reporting on organisational performance of selected oil and gas companies in the Niger Delta region of Nigeria. Research Journal of Finance and Accounting, 4(3), 57–73. Beredugo, S. B., & Mefor, I. P. (2021). The impact of environmental accounting and reporting on sustainable development in Nigeria. Research Journal of Finance & Accounting, 3(7), 2222–2847. Enahoro, J. A. (2009). Design and bases of environmental accounting in oil & gas and manufacturing sectors in Nigeria (Unpublished doctoral dissertation). Covenant University, Ota, Nigeria. Freeman, A. E. (1995). Towards an epistemology for radical accounting: Beyond objectivism and relativism. Critical Perspectives on Accounting, 6(6), 485–509. Hasan, S., & Hasan, O. (2021). The importance of environmental accounting in the context of sustainable development and within RDI FRS evaluation. In Proceedings of the 3rd International Symposium on Sustainable Development. Hasan, S., & Ahmet, A. (2019). The importance of environmental accounting for sustainable development. In Proceedings of the 1st International Symposium on Sustainable Development. Kihamba, R. I. (2017). The relationship between environmental accounting and reporting practices and profitability in manufacturing firms on the Nairobi Securities Exchange (Unpublished master's thesis). University of Nairobi. Liu, W. C., & Lin, C. F. (2005). Performance efficiency evaluation of Taiwan’s shipping industry: An application of data envelopment analysis. Proceedings of the Eastern Asia Society for Transportation Studies, 5, 467–476. Magara, R., Aminga, N., & Momanyi, E. (2015). Effect of environmental accounting on company financial performance in Kisii Company. British Journal of Economics, Management & Trade, 10(1), 1–11. Makori, D. M., & Jagongo, A. (2013). Environmental accounting and firm profitability: An empirical analysis of selected firms listed in the Bombay Stock Exchange, India. International Journal of Humanities and Social Science, 3(18), 248–256. Mohammad, D. H., Mohammad, S. B., & Abdul, B. B. (2021). Environmental accounting and sustainable development: An empirical review. International Journal of Business and Technopreneurship, 6(2), 335–350. Morhardt, J. E., Baird, S., & Freeman, K. (2021). Scoring corporate environmental and sustainability reports using GRI 2000, ISO 14031, and other criteria. Corporate Social Responsibility and Environmental Management, 28(3), 215–233. Ofoegbu, G. N. (2023). Advanced financial accounting. Precision Publishers Limited. Okon, E. E., Sunday, O. E., & Bassey, E. B. (2023). The impact of environmental accounting and reporting on the organizational performance of selected oil and gas companies in the Niger Delta region of Nigeria. Research Journal of Finance and Accounting, 4(3). Bassey, E. B., Sunday, O. E., & Okon, E. E. (2013). The impact of environmental accounting and reporting on the organizational performance of selected oil and gas companies in the Niger Delta region of Nigeria. Research Journal of Finance and Accounting, 4(3), 125–136. Olayinka, M. U., & Oluwamayowa, A. L. (2024). Corporate social reporting and financial performance: The Nigerian experience. Journal of Economic and Sustainability Development, 3(4), 44-54. Rakesh, K. S. (2021). Environmental protection: Factors and affecting actions. International Journal of Research, Granthaalayah, 3, 2394-3629. Ezejiofor, R. A., John-Akamelu, R., & Chigbo, B. E. (2016). Effect of sustainability environmental cost accounting on the financial performance of Nigerian corporate organizations. International Journal of Scientific Research and Management (IJSRM), 4(8), 4536–4549.

More Articles from JOURNAL OF ACCOUNTING AND FINANCIAL MANAGEMENT

Cashflow Management and the Performance of Commercial Banks in Nigeria

Author: Jeffrey Ayas Iyakonbogha, Clement E. Ozele

The Nigerian Code of Corporate Governance and Financial Performance of Deposit Money Banks in Nigeria

Author: i, Eneaniofu Daniel Mmaduakonam, ii, Azolike Nkiru Nkechi, iii, Emeter Patrick Okechukwu, iv, Okwor Emmanuel Ejimnkonye