ENVIRONMENTAL RESTORATION COSTS DISCLOSURES AND INVESTORS' BEHAVIOUR IN THE OIL AND GAS FIRMS IN NIGERIA

The disclosure of environmental remediation costs usually sends signal to the stakeholders of how responsible the firm is. This study was therefore conducted to investigate the relationship between disclosure of remediation costs and the behaviour of investors in the capital market. The independent variable of the study was the environmental remediation costs disclosure which was proxied by environmental clean costs disclosure, waste management cost disclosure, environmental safety costs disclosure, community development cost disclosure and pollution control cost disclosure; while the dependent variable was the investor’s behaviour which was proxied by market capitalisation. The population of the study comprised of nine (9) listed oil and gas firms in the Nigerian Exchange Group as at 2023 of which the whole population was used for the study. The study adopted ex post facto research design as data were obtained from published financial statements of the selected firms for the years’ 2014 to 2023 using contents analysis. The data were analysed with descriptive statistics, correlation and regression using SPSS version 10. The results of analysis indicate that environmental clean-up costs disclosure and waste management costs disclosure shows significant positive relationship with market capitalisation while environmental safety costs disclosure and community development cost disclosure show insignificant negative relationship with market capitalisation. It was concluded that the disclosure of remediation costs have significant relationship with investor’s behaviour in the capital market. Arising from the findings and conclusion of the study, it was recommended, amongst others, that oil and gas firms should not only prioritize the restoration of the environment but should also disclose the costs of such restoration in order to project their image to the stakeholders.