Research Article

Assessing the Effect of Sustainability Reporting on the Financial Performance of Listed Oil and Gas Companies in Nigeria

Henry Habila1*, Lukman Jimoh Rahim2
1 Federal University Wukari
2 University of Jos
* Corresponding author: habilahenry@gmail.com
Published: Jul, 2026
DOI: 10.67862/nahj.2026.jfey7kmg
Pages: 78-105

Abstract

The oil and gas sector in Nigeria is confronted with major challenges that are undermining its financial performance. Substantial costs for environmental cleanup, rising operational expenses, mandatory community development commitments, and growing requirements for sustainability reporting are all placing significant strain on companies. These issues are impeding growth and creating conflicts with the core corporate goal of maximizing shareholder value. It is on this light that this study was set out to investigates the effect of sustainability reporting on the financial performance of listed oil and gas companies in Nigeria over an 11-year period (2015–2025). The research focuses on three key dimensions of sustainability reporting: social, economic, and environmental. Financial performance, the dependent variable, is proxied by Return on Capital Employed (ROCE). The study adopted an ex-post facto research design. The population consists of all seven (7) oil and gas firms listed on the Nigerian Exchange Group as at 31 December 2025. A census sampling technique was employed, and data were sourced from secondary sources, consistent with the quantitative nature of the study and its positivist paradigm. Panel multiple regression analysis was used to examine the relationships, supported by descriptive statistics, correlation matrix, and post-estimation tests including multicollinearity, Hausman test, and random effects model diagnostics. The regression results show a positive but statistically insignificant relationship between social sustainability reporting and ROCE. In contrast, both economic and environmental sustainability reporting exhibited negative but insignificant associations with ROCE. Based on these findings, the study concludes that sustainability disclosures do not significantly influence the return on capital employed of listed oil and gas firms in Nigeria. The policy implication is that making sustainability reporting mandatory in annual reports could potentially lead to a more noticeable impact on financial performance. Accordingly, the study recommends that regulatory authorities and legislators should enforce mandatory sustainability reporting for oil and gas companies, with particular emphasis on adopting standardized environmental sustainability frameworks to ensure compliance and effective monitoring.

Keywords

Sustainability reporting social reporting economic reporting environmental reporting GRI 11 return on capital employed

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How to Cite

Habila, H., & Rahim, L. J. (2026). Assessing the Effect of Sustainability Reporting on the Financial Performance of Listed Oil and Gas Companies in Nigeria. Nigerian Accounting Horizon Journal, 11(1), 78-105. https://doi.org/10.67862/nahj.2026.jfey7kmg

H. Habila, and L. J. Rahim, "Assessing the Effect of Sustainability Reporting on the Financial Performance of Listed Oil and Gas Companies in Nigeria," Nigerian Accounting Horizon Journal, vol. 11, no. 1, pp. 78-105, July 2026. doi: 10.67862/nahj.2026.jfey7kmg

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