SUSTAINABILITY REPORTING AND PROFITABILITY OF LISTED OIL AND GAS FIRMS IN NIGERIA
Keywords:
Corporate Profitability, Earnings Per Share, Return On Assets, Return On Equity, Sustainability ReportingAbstract
This study examined the effect of sustainability reporting on corporate profitability in listed oil and gas companies in Nigeria. The specific objective was to determine the effect of sustainability reporting on return on assets, earnings per share and return on equity of listed oil and gas firms in Nigeria. The ex post facto research design was employed using twelve companies in the oil and gas sector. Data employed were extracted from 2009 to 2022 reports of studied companies and diagnosed with appropriate statistical tests (multicollinearity and heteroskedasticity tests) for fitness of regression. The panel regression analysis was utilised to determine the effect of sustainability reporting on profitability and F statistic used to test the hypothesis. The study revealed that sustainability reporting and profitability are significantly related. Specifically, sustainability reporting had a positive and significant effect on return on assets and earnings per share. However, no effect was found on net profit margin and return on equity of quoted oil and gas firms. In conclusion, the benefits of sustainability reporting such as satisfaction of host communities outweigh the costs associated with it and reflects in the profitability of these firms. It was recommended that business organizations should not be deterred by the costs involved in sustainability reporting but commit resources to sustainable operations for long and short term benefits.
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