THE EFFECT OF ENVIRONMENTAL INFORMATION DISCLOSURE ON MARKET VALUE OF LISTED OIL AND GAS FIRMS IN NIGERIA
Keywords:
Environmental disclosure; market value; voluntary disclosure; market capitalisationAbstract
Firms have been under pressure to provide evidence of their contributions to the replenishment of the environment. This is in view of the fact that activities of enterprises have impacted on the environment in which they operate. Disclosure of information about the contributions of firms to the environment have been adjudged as an act which endears such firms to the stakeholders. This study was therefore conducted to examine the relationship between environmental information disclosure and market value of listed oil and gas firms in Nigeria. The dependent variable of the study was the environmental information disclosure which was proxied by greenhouse gas emission disclosure, natural occurrence disclosure and environmental fines and penalties; while the dependent variable was the firm value which was proxied by market capitalisation. The population of the study comprised all listed ten oil and gas companies operating in Nigeria. The study adopted an ex-post facto research design and utilized a panel data of ninety pooled observations gathered from nine listed oil and gas firms in Nigeria over ten years period of 2013 to 2022 and employed a panel multiple regression technique to analyze the data via E-views 10.0 statistical packages. The study findings revealed that greenhouse gas emission disclosure and Natural occurrence disclosure have significant positive relationships with market capitalization of listed oil and gas firms in Nigeria while environmental fines and penalties disclosure has insignificant positive relationship with market capitalization of listed oil and gas firms in Nigeria. Consequently, the study concluded that environmental information disclosure is significantly related to the market value of listed oil and gas firms in Nigeria. Based on the findings, the study recommends amongst others the inclusion of the disclosure of information on environment in the annual reports of oil and gas companies operating in Nigeria to enhance sustainable strategies, financial performance and market capitalization.