SUSTAINABILITY REPORTING AND FIRM FINANCIAL PERFORMANCE

ABSTRACT

This study investigates the relationship between sustainability reporting and firm financial performance, focusing on oil and gas companies listed on the Nigerian Exchange Group (NGX). The research aims to determine how corporate environmental, ecological, and community development initiatives influence financial outcomes. Utilizing secondary data from 2002 to 2023, the study employs a longitudinal research design to analyze the impact of sustainability practices on firm performance over time. The analysis involves descriptive statistics and multiple regression techniques to explore the causal relationship between firm financial performance and sustainability reporting factors, including environmental, ecological, and community development efforts. The findings reveal a significant positive relationship between return on assets (ROA) and firm financial performance, suggesting that higher ROA leads to better financial outcomes. However, the study also finds that environmental and community development factors have a positive but statistically insignificant impact on firm performance. Based on these findings, the study recommends that oil and gas firms in Nigeria focus on maximizing ROA through improved operational efficiency and asset utilization. Additionally, firms should integrate environmental sustainability practices to enhance brand reputation and attract environmentally conscious investors, despite the lack of direct financial impact observed in the study. Furthermore, community development initiatives should align with business objectives to foster stronger community relationships and support long-term financial sustainability.