Effect of Corporate Environmental Disclosure on Investor Decisions in the Oil and Gas Sector in Nigeria

Chinedu Francis Egbunike

doi:10.55047/transekonomika.v6i5.1254

Authors

Chinedu Francis Egbunike* Department of Accountancy, Nnamdi Azikiwe University, Awka, Nigeria https://orcid.org/0000-0002-4159-8630

DOI:

https://doi.org/10.55047/transekonomika.v6i5.1254

Keywords:

Corporate Environmental Disclosure, Investor Decisions, Market Capitalization, Nigerian Exchange Group, Oil and Gas Sector

Abstract

Backgrounds: Corporate environmental disclosure is increasingly important to investors, yet Nigerian studies examine it only in aggregate, obscuring which specific dimensions drive investor response.

Objectives: This study specifically assesses the effects of environmental policies and practices disclosure, environmental expenditures and investments disclosure, GHG emissions disclosure, compliance with environmental regulations disclosure, and environmental audits and certifications disclosure on market capitalization.

Methodology: The study adopted a quantitative correlational research design using secondary panel data drawn from the annual reports, sustainability reports, and financial statements of all 13 oil and gas companies, covering the five-year period 2019 to 2023 (65 firm-year observations). A binary content-analysis disclosure checklist was used to construct an index score for each disclosure dimension, and data were analysed using descriptive statistics, correlation analysis, and panel regression.

Findings: Environmental policies and practices disclosure (β = .34, p < .001), GHG emissions disclosure (β = .29, p < .01), and environmental audits and certifications disclosure (β = .31, p < .001) each had significant positive effects on market capitalization, while environmental expenditures and investments disclosure (β = .18, p < .05) and compliance with environmental regulations disclosure (β = .21, p < .01) also showed significant, comparatively smaller positive effects.

Conclusions: Corporate environmental disclosure across all five dimensions is significantly and positively associated with market capitalization, with policy disclosure and third-party audit certification exerting the strongest effects. Firms should strengthen policy communication and pursue independent audits and certifications, while regulators should standardize disclosure requirements.

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