Green accounting practices and the profitability of oil and gas companies in Nigeria
Keywords:
Green accounting practices, Carbon accounting disclosure, environmental cost accounting, Profitability, Return on Equity, Oil and Gas companiesAbstract
The study examined Green Accounting practices and the Profitability of Oil and Gas companies in Nigeria. The research was carried out using an Ex-post facto research design. Secondary data were employed for this study. A purposive sampling technique was adopted, selecting companies based on the availability and completeness of their financial data for the study period. The research revealed a significant negative effect of Environmental Cost Accounting on ROE, while Carbon accounting disclosure has a positive and significant effect on ROE. The study, therefore, concluded that environmental costs have significant positive effects on profitability. In contrast, carbon accounting disclosure has a significant positive relationship with profitability. Therefore, the study concluded that Environmental expenditures have a direct and negative impact on a firm's profitability in the short run. Transparency about carbon accounting practices has a positive influence on a firm's Return on Equity. Carbon accounting disclosure is a powerful tool for driving shareholder value. The study recommended that Oil and gas companies in Nigeria should adopt a strategic approach to managing environmental costs such as investing in environmental-friendly initiatives that generate long-term financial benefits. It also went further to recommend that Oil and Gas companies should prioritize transparency in their sustainability reporting as this can improve their ROE by attracting environmentally conscious investors and gaining a competitive edge over companies without carbon disclosure.
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