EFFECT OF SUSTAINABILITY REPORTING ON FINANCIAL PERFORMANCE OF LISTED OIL AND GAS IN NIGERIA

Abstract In the contemporary landscape of global finance, the integration of sustainability reporting into business practices has become a pivotal theme, with banks assuming a central role in the pursuit of responsible and ethical operations. This study examined the effect of sustainability reporting on the financial performance of listed oil and gas firms in Nigeria, using ROA as measures of performance from 2013 to 2023. The population of the study comprise listed oil and gas firms in Nigeria. Secondary data were extracted from the annual report and sustainability report of the sampled firms. The data were analysed using Generalized Leas Square regression. The analysis yielded several key findings. First, economic sustainability reporting was found to have a significant positive effect on financial performance. Second, the results revealed that environmental sustainability reporting exerts a mixed effect on financial performance. While firms that disclose proactive environmental initiatives tend to benefit in terms of reputation and long-term investor confidence, the associated compliance and mitigation costs are found to reduce short-term profitability. This suggests that environmental reporting is both a strategic opportunity and a financial challenge in the Nigerian oil and gas sector. Third, social sustainability reporting demonstrated a negative effect on financial performance. Firms that disclosed their commitments to employee welfare, community relations, and corporate social responsibility projects reported inverse effect on financial outcomes, highlighting the value of social investments in reducing community conflict and strengthening the social license to operate may not result to financial performance. Fourth, the study found that governance sustainability reporting has a significant impact on firm performance. Disclosure of governance practices such as board independence, audit committee oversight, and anti-corruption policies improved accountability, reduced agency costs, and contributed positively to both accounting-based and market-based performance measures. The study therefore recommends that the management of Oil and gas firms in Nigeria should embed economic sustainability reporting into their strategic planning, not as an afterthought but as a central pillar of corporate governance. This will help strengthen stakeholder trust and ensure alignment with both national economic goals and global sustainability frameworks.