Environmental Accounting Disclosures and Financial Performance: A Survey of Nigerian Oil and Gas Industry

Abstract

Environmental Disclosure is environmental information owned by a company by disclosing the environmental conditions in the company's annual financial report which results in the presence or absence of annual report disclosures that depend on company policy. The broad objective of this study is to assess the environmental accounting disclosure on financial performance: A survey of Nigerian oil and gas companies listed in the Nigerian Stock Exchange (NSE). The study employed econometrics analytical techniques including descriptive statistics, matrix correlation of variables and panel regression techniques of both fixed effect and random effect model. The results of the descriptive statistics indicate that the average return on asset within the period is 0.0615   with minimum share price of 0.2603    and maximum of 1.5130. The standard deviation of 0.1916 reveals a relatively low variation in the return on asset among the firms over the period. The results further reveal that the average return on equity is 0.2946 with minimum and maximum value of -0.4068 and 3.4224 respectively. Its corresponding standard deviation of 0.5661   show considerably low variation in the return on equity among the firms and over the period considered. In addition, the results reveal that the average environmental accounting disclosure is 0.1300   implying that the environmental accounting disclosure practices among the firms in the industry is relatively low since it is below the average. The minimum and maximum environmental disclosure is found to be 0.0820   and 0.1474 respectively. From the correlation matric results, (ROA, ROE, FS and LEV) conjugate a positive relationship with (EAD) dependent variable except (ROCE), which conjugates an inverse relationship with dependent variable (EAD). From the results of all the model, the estimated coefficient of environmental accounting disclosure (0.0676, 0.6046, and 0.8078) and p value of (0.049, 0.039, and 0.156) indicate that environmental accounting has positive impact on financial performance and the positive impact is significant at 5 percent, 5 percent, and 10 percent   levels of significance. Based on the findings, the current study recommends that government should put in place workable monitoring mechanism to ensure that firms in the Nigerian oil and gas industries engage in environmental accounting disclosure, doing this will increases s their performance.