Environmental Impact Accounting and Financial Performance of Oil and Gas Companies in Nigeria: A Detailed Empirical Investigation
Keywords:
Disclosure, Environmental, Financial, Growth, Performance, Leverage, Size Developing economy, Environmental management accounting.Abstract
In the pursuit of sustainable business practices, understanding the financial implications of environmental management has gained paramount importance. The Oil and Gas sector provided a critical role in the Nigeria’s economic growth and development. However, many have raised the concerns of the environmental impact of the exploration activities of the oil and gas companies within the Nigerian Economy.
The environmental impact, methodological, and theoretical deficiencies discovered in this area were filled, and the study's purpose was met. Furthermore, this paper focussed on the empirical investigation of the environmental impact accounting and financial performance of listed Oil and Gas companies within the largest economy in Africa.
To address these environmental challenges and investigate the potential impact of environmental management accounting (EMA) practices on company performance, this paper utilized a quantitative methodology. Panel data from all the nine (9) Oil and Gas listed firms' audited financial statements from 2007 to 2023 on the Nigerian Exchange Group (NGX) as at September 30, 2023 were analyzed. It is important to note that these oil and gas companies may have variations in their EMA systems or policies.
To provide a varied representation of the industry, the businesses demonstrated particular requirements such as size, industry segment, and operational features. Variations in EMA practices may arise, however, due to the particular character of each business. Some businesses may have well-established EMA systems with substantial environmental cost tracking and sustainability activities, whilst others may have less thorough practices.
The paper findings argued that environmental effect and concerns have an impact on the financial performance of Nigerian listed oil and gas businesses. As a result, it was advised that investors consider environmental and operational factors while making investment decisions. Finally, authorities should adopt laws and regulations to ensure that Nigerian oil and gas corporations understand the need of incorporating environmental and operational performance into long-term strategic goals.