Effect of Corporate Sustainability Reporting on Economic Value Added of Oil and Gas Companies in Nigeria

Abstract

Effect of sustainability reporting on the economic value added of Nigerian oil and gas companies listed on the Nigerian Exchange Group is investigated in this research. A company's overall performance is significantly improved by effective sustainability reporting. There haven't been many research done on the potential effect of sustainability reporting on the economic value added of Nigerian oil and gas companies. Strategic management and corporate planning should heavily rely on sustainability reporting, yet many business organisations worldwide do not include it in their corporate strategy. This study adopts the Stakeholders theory and uses sustainability reporting to investigate how they affect the economic value added of oil and gas companies in Nigeria. In order to gather information regarding company’s sustainability reporting and economic value added, this study employed secondary data of a quantitative content analysis of the annual reports. The content analysis and regression analysis were conducted to examine the research objective. The data analyses were done using STATA. The research findings indicate a negative and insignificant effect of environmental and economic reporting on economic value added. This implies that environmental and economic reporting are not important for decision making that might influence the value of Nigerian oil and gas companies. Social reporting has a positive and insignificant effect on economic value added indicating that social reporting has the potentials to influence economic value added that is relevant for decision in oil and gas companies in Nigeria but the effect is not enough to be deemed significant. To improve the performance of oil and gas companies, the study recommends that oil and gas companies should engage in Sustainability reporting particularly social reporting, prepare their sustainability report in accordance with Global Reporting Initiative (GRI) guidelines as that will improve their performance which will invariably lead to a sustainable growth rate, as well as keep a high position in the corporate sustainability reporting ranking.