Environmental Cost and Financial Performance of Listed Oil and Gas Companies in Nigeria

Abstract:

The study investigated the effect of environmental costs on the financial performance of listed oil and gas companies in Nigeria. Ten oil & gas firms listed on the Nigerian Stock Exchange were investigated and secondary data were obtained from the annual reports of the companies from 2011-2020. Environmental cost was measured using maintenance cost data while financial performance was measured using gross margin and return on capital employed (ROCE). The Fixed effect regression model was used as the method of data analysis. Findings revealed that environmental cost has a positive and significant effect on the financial performance (GPM) (). Therefore, the study concludes that environmental cost has positive effects on financial performance. Thus, it is recommended that the management of the oil and gas companies should intensify efforts to maintain their environment costs so as to further enhance their financial performance.