Environmental Conservation Costs and Sustainable Business Growth in Listed Oil and Gas Companies in Nigeria

Abstract

This study examined the relationship between the costs of environmental conservation and sustainable business growth of publicly traded Nigerian oil and gas companies. The study’s major objectives were to determine how the independent variables of environmental conservation represented by community development cost, pollution cost and environmental remediation cost affected the dependent variables of sustainable business growth represented by return on asset and gross margin return on investment. Data for the study came from financial statements and annual reports covering the years 2011–2022, and it employed an ex post facto research design. Regression analysis in E-View 10.0 was used to test the hypotheses. According to the empirical data analysis, there is a positive and statistically significant relationship between community development costs, and gross margin returns on investment (0.526033 and 0.000918), which implies that there is a significant relationship between the gross margin return on investment and sustainable business growth. Similarly, 2.652824 and 0.000000 indicate a favorable and statistically significant relationship between pollution cost and GMRI. However, -0.233125 and 0.000000 demonstrate a negative and statistically significant relationship between environmental remediation costs and GMRI. A total of three independent factors accounts for 53% of the variance in the dependent variable, according to the R-squared value of 0.534613. According to the study’s conclusions, there is a positive correlation between the costs of environmental conservation and the sustainable growth of listed oil and gas companies in Nigeria. The study also suggests that oil and gas companies should maintain a friendly environment for this will reduce the amount spent in repairing the damaged that their activities had caused on the environment. The goal of this initiative is to boost the efficiency of community development groups by providing incentives for their work on the created friendly environment.