EFFECT OF SUSTAINABILITY REPORTING ON SHARE PRICE OF LISTED OIL AND GAS FIRMS IN NIGERIA

Abstract

In recent years, sustainability reporting has emerged as a strategic tool for corporate accountability, particularly in environmentally sensitive sectors such as oil and gas. In Nigeria, despite increasing pressure for transparency, sustainability disclosures remain inconsistent and largely voluntary, raising questions about their effectiveness in influencing investor behavior and firm valuation. This study examined the impact of sustainability reporting measured through economic, environmental, and social disclosures on the share price performance of listed oil and gas firms in Nigeria. The study adopted an ex post facto research design using secondary data extracted from the audited annual reports of twelve (12) listed oil and gas companies over a Ten-year period (2014–2023). Panel regression analysis was employed to evaluate the relationship between the sustainability disclosure indices and share price. The findings revealed that all three dimensions of sustainability reporting significantly and positively influence share price, with social disclosure exerting the strongest effect, followed by environmental and economic disclosures. These results affirm the relevance of Legitimacy Theory, suggesting that firms which align their activities with societal expectations through transparent reporting are more likely to gain investor confidence and market valuation. Based on these findings, the study recommends the enforcement of standardized sustainability disclosure frameworks, increased focus on social and environmental reporting, and capacity building for corporate reporting officers. It also calls for stronger regulatory oversight and stakeholder engagement to improve the credibility and impact of sustainability reporting practices within Nigeria's oil and gas sector.