Green Accounting and Financial Performance of Selected Listed Oil and Gas Companies in Nigeria

Abstract

This study investigates the impact of green accounting on the financial performance of listed oil and gas companies in Nigeria. Green accounting used as the independent variable was assessed through four key components: remediation and pollution control, emission cost control, renewable energy expenditure, and waste management costs. Financial performance, the dependent variable, was measured using Return on Assets (ROA). Ex-post facto research design was employed to achieve the study's objectives. The study population comprised all eight oil and gas firms listed on the Nigerian Exchange Group (NGX). Secondary data were extracted from the annual reports and financial statements of these companies over a 15-year period, spanning from 2010 to 2024. The data were analyzed using the Auto-Regressive Distributed Lag (ARDL) model to determine both short-term and long-term relationships between variables. The findings revealed that both remediation and pollution control and waste management costs have a statistically significant impact on the ROA of the oil and gas firms. Conversely, emission cost control and renewable energy expenditures did not exhibit a significant effect on ROA. Based on these findings, the study recommends that oil and gas firms in Nigeria strategically integrate environmental costs particularly those related to remediation and pollution control into their financial planning. Adopting comprehensive green accounting practices, such as tracking and reporting environmental remediation and prevention costs can help reduce long-term liabilities, minimize regulatory penalties, and enhance operational efficiency.