Sustainability Reporting and Financial Performance Sustainability Reporting and Financial Performance

Lucy J. Okon, Ime B. Ekwere & Agnes S. Okpokpo

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Abstract

The main objective of this study was to examine the effect of sustainability reporting on the financial performance of listed oil and gas firms in Nigeria from 2012 to 2021. The independent variable used in other to ascertain the effect on return on capital employed were social, health and safety and environmental disclosures. The research design adopted for the study was ex post facto and secondary data were obtained from the studied companies' annual report and Nigeria Exchange Group fact book. Robust panel least square regression was adopted to test the three hypotheses formulated for the study. From the analysis, it was observed that social disclosure, health and safety disclosure and environmental disclosure have a significant positive effect on the return on capital employed by oil and gas companies in Nigeria. Based on these findings, it was concluded that sustainability reporting has a significant effect on the return on capital employed by oil and gas companies in Nigeria. Thus, it was recommended that oil and gas companies should make sustainability reporting mandatory at the industry level, as such, a standardized sustainability index should be put in place as a benchmark to monitor compliance.

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