Corporate Governance and Environmental Policy Index of Sustainability Reporting in Oil & Gas Companies Quoted in Nigeria

Abstract

Evidently, environmental sustainability reporting was faced with unprecedented challenges due to environmental degradation, inadequate handling of environmental protection by polluting-intensive companies’ selective disclosure approach predominantly in the oil and gas companies in Nigeria. This work aimed at examining the effect of corporate governance on environmental policy index of sustainability reporting in oil and gas companies quoted in Nigeria. Expost-facto research design was adopted and the population of the study comprised all the 12 oil and gas companies quoted in Nigeria as at 31 st December 2020, from which a sample of 8 companies was formulated. Data were extracted between 2006 and 2020 from published financial statements of the sampled companies and environmental disclosure checklist in line with Global Reporting Initiatives. Multiple regression was used in analyzing the data. The study revealed that environmental sustainability reporting of oil and gas companies quoted in Nigeria was significantly affected by corporate governance, (AdjR 2 = 0.157; Wald-test= 21.18; P-value = 0.000). Also, firm size and firm leverage significantly controlled the effect of corporate governance on environmental policy, (AdjR 2 = 0.180; Wald test= 32053; P-value = 0.000). It was concluded that, there is significant positive effect of corporate governance on environmental policy index of sustainability reporting in oil and gas companies quoted in Nigeria and also, corporate governance with moderating effect of firm size and firm leverage had positive significant effect on the environmental policy index of sustainability reporting in oil and gas companies quoted in Nigeria. The study recommended that Shareholders should obtain adequate information on environmental protection before taking investment decisions, planning and portfolio diversifications in the oil and gas companies in Nigeria.