Corporate Sustainability Reporting and Financial Performance of Oil and Gas Companies in Nigeria

Abstract:

Corporate reporting scope has broadened in response to the demands of users. Sustainability reporting has been in practice in many countries including Nigeria. This research is an empirical analysis of the relationship that exists between corporate sustainability disclosure and financial performance of oil and gas companies in Nigeria. Specifically, this study examined the impact of corporate sustainability reporting on the financial performance of Oil and Gas companies in Nigeria. This work contains a review of relevant literature, hinging the topic on stakeholder theory. Cross-sectional research design was utilized in undertaking the study. A sample of six (6) companies were selected from the oil and gas sector of public limited liability companies listed on the Nigerian Stock Exchange and studied from 2012 to 2017 financial years. Secondary data were gathered for Environmental, Social and Governance (ESG) disclosures by content analysis of corporate reports. Secondary data were also gathered to measure company performance by computing Return on equity ratio from the financial statements of the selected companies. Multiple linear regression analysis was used to test the hypotheses. Findings revealed a positive relationship between sustainability disclosure and financial performance. It is hereby, recommended that company directors and managers should make sustainable decisions while carrying out their business. They should further ensure full disclosure of their sustainability activities since it has a positive effect on the financial performance of the company which is in accordance with profit maximization aim of the business.