Indonesian Journal of Law and Economics Review
Vol 19 No 4 (2024): November
Social Accounting

Environmental Cost Disclosure and Financial Performance of Oil and Gas Firms
Pengungkapan Biaya Lingkungan dan Kinerja Keuangan Perusahaan Minyak dan Gas Bumi


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  • Fred Itotaziba Sunday*,
  • Nwosu Eleazar Chimezie
Fred Itotaziba Sunday
Department of Accounting, School of Management Studies, Federal Polytechnic Ukana, Akwa Ibom State, Nigeria *
Nwosu Eleazar Chimezie
Department of Accounting, School of Management Studies, Federal Polytechnic Ukana, Akwa Ibom State, Nigeria

(*) Corresponding Author
DOI: https://doi.org/10.21070/ijler.v19i4.1193
Published October 9, 2024
Keywords
  • Health,
  • Safety Cost,
  • Waste Management Cost,
  • ROA
How to Cite
Sunday, F. I., & Chimezie, N. E. (2024). Environmental Cost Disclosure and Financial Performance of Oil and Gas Firms. Indonesian Journal of Law and Economics Review, 19(4), 10.21070/ijler.v19i4.1193. https://doi.org/10.21070/ijler.v19i4.1193

Copyright (c) 2024 Fred Itotaziba Sunday, Nwosu Eleazar Chimezie

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This work is licensed under a Creative Commons Attribution 4.0 International License.

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Abstract

General Background: The relationship between environmental cost disclosure and financial performance is essential in environmentally impactful sectors like oil and gas. Specific Background: This study focuses on listed oil and gas firms in Nigeria, examining health and safety costs and waste management costs as predictors of return on assets (ROA). Knowledge Gap: Existing research shows inconsistent findings on the effects of environmental disclosures on financial performance, necessitating further investigation. Aims: This study aims to clarify the impact of environmental cost disclosures on financial performance, particularly through health and safety and waste management costs. Results: Using ex-post-facto research design and secondary data analysis, the findings reveal a significant positive relationship between environmental cost disclosures and financial performance, highlighting the importance of these costs on ROA. Novelty: By applying legitimacy theory and focusing on specific environmental costs, this research fills a gap in Nigerian literature. Implications: The study recommends enhanced environmental policies for oil and gas firms, promoting accountability and aligning financial performance with ecological responsibilities.

Highlights:

  • Significant positive relationship exists between environmental cost disclosures and financial performance (ROA) in Nigerian oil and gas firms.
  • Health and safety costs and waste management costs are critical predictors of financial performance.
  • The study emphasizes the need for enhanced environmental policies and corporate accountability in the oil and gas sector.

 

Keywords: Health, Safety Cost, Waste Management Cost, ROA

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