Environmental Conservation, Sustainability and Financial Performance of Listed Oil and Gas Companies in Nigeria

Abstract

This study examined the effect of environmental accounting disclosures on the financial performance of listed oil and gas companies in Nigeria. Specifically, it investigated how environmental sustainability and environmental conservation influence financial performance indicators—Return on Assets (ROA), Return on Equity (ROE), and Profit After Tax (PAT). Using an ex-post facto research design, secondary data were extracted from the annual reports of 11 oil and gas firms listed on the Nigerian Exchange Group covering the period 2011–2020. Multiple regression analysis was employed to test the hypotheses. The results revealed that environmental sustainability had a significant impact on all three financial performance measures: negatively on ROA (p = 0.0045) but positively on ROE (p = 0.0014) and PAT (p = 0.0440). Conversely, environmental conservation exhibited a positive and significant relationship with ROA (p = 0.0095) but no significant effect on ROE (p = 0.9229) and PAT (p = 0.9287). These findings highlight the differential effects of environmental disclosure components, suggesting that while sustainability initiatives are strongly linked to profitability and long-term value creation, conservation disclosures remain limited and less impactful. The study recommends that oil and gas companies integrate sustainability practices into corporate strategy and align disclosures with IFRS Sustainability Standards to attract green financing and improve accountability. For regulators and policymakers, stricter disclosure frameworks are necessary to strengthen environmental stewardship in the sector. Future research could broaden the scope of environmental disclosure variables, extend analysis to other industries, and adopt cross- country comparisons to deepen understanding of the nexus between environmental reporting and corporate performance.

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