Environmental Disclosure and Profitability: Evidence from Oil and Gas Firms Listed in Nigeria

Abstract

The oil and gas industry of the Nigerian have caused several avoidable environmental degradations to the host communities of the operating firms with the outfits having little or no attention to contributing or incurring much costs to the conservation of these environments for future uses. This study evaluates the relationship between environmental cost disclosure and profitability (performances) of firms in oil and gas industry in Nigeria. Time series data were collected from published annual reports of ten sampled companies for ten years (2010-2019) based on data availability. Ex post facto design was used. Environmental costs were represented in terms of waste management cost, pollution control cost, fines and litigation cost and community development cost while return on assets, ROA, was used as proxy to firm profitability. Pearson product moment coefficient of correlation and multiple regression analysis were used to analyze the data. Econometric result reveals that environmental cost has no significant effect on the performance of oil and gas firms in Nigeria.