Faith E. Onyebuenyi, Grace N. Ofoegbu
This study examined the effect of environmental sustainability disclosure on financial performance of listed oil and gas companies in three countries within sub-Sahara Africa: Nigeria, Namibia, and Kenya. Based on descriptive and ex-post facto research design panel data set collected from fifteen (15) oil and gas listed firms in all three countries of interest within a nine (9) year time frame (2011 to 2019) were utilized. Six hypotheses were formulated, using content analyses procedure based on Global Reporting Initiative (GRI) standard to extract required information on environmental sustainability disclosure proxies: Emission and Energy disclosure, Effluent and Waste information disclosure, sustainability compliance policy disclosure, protection expenditure and investment disclosure and grievance policy disclosure been the independent variables of interest. Firm financial performance which is the dependent variable is measured in terms of return on equity, gross profit margin and earnings per share together with a control variable were all included in specifying three econometric models. In this study, we employed Robust Least Square Regression analyses technique to test the stated hypotheses. The model’s goodness of fit as captured by the Fisher statistics and the corresponding significant probability value suggest that the specified models are fit and can be employed for interpretation and policy recommendation. Among the outcomes from the analyses, we find that emission and energy disclosure have significant negative and positive effect on performance measure of return on equity and gross profit after tax margin respectively. Particularly the effect of effluent and hazardous waste disclosure is seen to be statistically significant on performance measure of earnings per share during the period under investigation. Further, we find that biodiversity and water disclosure significantly affect performance measures of return on equity(positively) and gross profit after tax margin(negatively) while the effect of environmental sustainability protection expenditure disclosure is seen to be positive and statistically significant on performance measure of gross profit after tax margin during the period under investigation. Notable among others, we recommend that environmental regulatory agencies complimented by governments prescribed environmental information disclosure standard policies in all three countries of interest should be strengthened. Environmental sustainability disclosure compliance should be made mandatory for listed oil and gas companies and the guidelines for environmental assessment should be established to compel companies to accommodate environmental disclosure. This will go a long way to sustain the positive narratives on financial performance evidenced in this study