Environmental Accounting Disclosure and Firm Value in the Nigerian Oil and Gas Sector

This study investigates the relationship between environmental accounting disclosure and firm value among oil and gas companies listed on the Nigerian Exchange Group. The oil and gas sector is responsible for significant environmental externalities in Nigeria, including gas flaring, oil spills, and land degradation. Pressure from international investors, civil society organizations, and regulators has prompted some companies to disclose environmental costs and liabilities in their financial and sustainability reports. This study uses a content analysis approach, extracting environmental disclosure data from the annual and sustainability reports of 10 listed oil and gas firms for the period 2019 to 2023. Environmental accounting disclosure is measured using a customized index covering pollution cost disclosure, remediation liability recognition, and environmental investment reporting. Firm value is proxied by Tobin's Q and market capitalization growth. Panel data regression with random effects estimation is applied. Results indicate that higher levels of environmental accounting disclosure are significantly and positively associated with firm value, supporting the value relevance of environmental information for investors in the Nigerian oil sector. Remediation liability disclosure showed the strongest positive association with market value. The study concludes that environmental accounting disclosure creates meaningful investor value signals in the Nigerian oil and gas market. It recommends that listed oil companies adopt mandatory environmental liability recognition standards aligned with IFRIC 1, and that the Nigerian Exchange Group include environmental disclosure quality in its listing compliance assessments.

Keywords: environmental accounting, oil and gas, firm value, ESG disclosure, Niger Delta.