Environmental Sustainability Disclosures and Financial Performance of Listed Oil and Gas Companies in Nigeria: An Application of Driscoll-Kraay Standard Errors Approach

Abstract

The oil and gas industry in Nigeria, a vital contributor to the nation's economy, has long been associated with significant environmental challenges. This empirical study explores the relationship between environmental sustainability accounting practices and the financial performance of eight listed oil and gas companies on the Nigerian Stock Exchange Market (NGX) as of January 17, 2022, in Nigeria. The study employed Driscoll-Kraay standard errors and revealed that environmental accounting had significant effects on returns on assets, earnings per share, and liquidity ratio. The study revealed that the implementation of environmental accounting practices had diverse effects on the performance of oil and gas companies in Nigeria. The findings encourage policymakers and stakeholders in the sector to utilise insights on the potential benefits and challenges associated with adopting environmental accounting practices, and design more effective regulations and incentives that promote environmental corporate responsibility. The study reported other significant policy-oriented findings.

Keywords: Environmental sustainability accounting; Financial performance; Oil and gas companies; Nigeria; Driscoll-Kraay standard errors.