Environmental Disclosure and Financial Performance: A Study of Listed Oil and Gas Firms in Nigeria

Oil and gas firms are expected to align with global sustainability goals and contribute to mitigating environmental challenges. Understanding how environmental disclosure influences financial performance is crucial in meeting these evolving stakeholder expectations. The study examined the effect of environmental disclosure on the financial performance of listed oil and gas firms spanning 2012 to 2022. Environmental disclosure was measured using the 34 GRI index. Financial performance was proxied as ROA, ROE, EPS, and NPM while the control variable was proxy as firms age, firms’ size, and leverage. The hypotheses were tested using Generalized Least Square and robust pooled regression. Based on the findings, environmental disclosure has a significant negative effect on ROA and EPS but is insignificant on ROE and NPM. In addition, firm age has a significant effect on ROA and ROE but is insignificant to EPS and NPM. Firm size and leverage have insignificant effects on ROA, ROE, EPS, and NPM. Based on these findings, the study concludes that EPS and NPM. Firm size and leverage have insignificant effects on ROA, ROE, EPS and NPM. Based on these findings, the study concludes that while environmental disclosure can enhance transparency and potentially lead to long-term benefits, it may have a significant negative effect on financial performance metrics like ROA and EPS in the short term. Management of oil and gas firms must carefully balance the benefits of environmental disclosure with its potential financial impacts, considering both short-term and long-term outcomes.