Determinants of Environmental Disclosure

Abstract

This study explores the factors of environmental disclosure across oil and gas corporations operating in Nigeria over a ten-year period (2012-2021). The study emphasizes the need for firms to disclose their environmental performance, particularly in the downstream oil sector, and examines the determinants that shape corporate disclosure, including leverage, firm size, and profitability, taking a holistic approach to examine their collective impact on environmental disclosure. The ex-post facto research design was employed, making use of panel data that includes ten years' worth of financial records for oil businesses that are quoted on the Nigeria Exchange Group. The data was analysed using the Panel least squares and diagnostic tests were run to confirm the regression study's findings. The findings revealed that environmental disclosure and business size are positively correlated, while profitability has no statistically significant impact. Also, interestingly, and contrary to early assumptions, the study finds that leverage positively improves corporate environmental disclosure, although at a 10% significance level. This led the study to recommend the implementation of incentives to motivate companies to improve their disclosures, particularly as it pertains to the environment.

Keywords: Environmental Disclosure, Oil and Gas Corporations