Environmental Accounting on Shareholders' Wealth of Listed Oil and Gas Firms in Nigeria

ABSTRACT This study investigates the effect of environmental accounting on shareholders’ wealth of listed oil and gas firms in Nigeria. It was driven by increasing global concerns about environmental degradation and the need for sustainable corporate practices. The research specifically focused on carbon accounting disclosure, water accounting disclosure, and energy accounting disclosure, assessing their individual and collective impact on shareholder wealth measured via share price, dividend payout, and market capitalization. An ex-post facto research design was adopted, using secondary panel data obtained from the financial statements and sustainability reports oil and gas firms listed on the Nigerian Exchange Group (NGX) between 2013 and 2024. Data analysis was conducted using descriptive statistics, correlation analysis, diagnostic tests, and panel regression. The findings reveal that energy accounting disclosure (EAC) significantly affects shareholder value, showing a positive coefficient of 0.724 (p = 0.023), indicating that firms that report energy use and conservation practices tend to have better investor valuation. In contrast, water accounting disclosure (WAC) and carbon accounting disclosure (CAD) did not exhibit statistically significant effects on shareholder wealth, with coefficients of –0.00699 (p = 0.203) and 0.0449 (p = 0.399) respectively. Descriptive analysis also revealed considerable variability in disclosure practices across firms, with carbon and water disclosures showing wide ranges and deviations. Overall, the results suggest that energy-related sustainability practices are positively perceived by the market, while water and carbon accounting disclosures have yet to significantly influence shareholder wealth in the Nigerian context. The study reinforces the relevance of stakeholder theory and environmental protection theory in explaining how firms respond to environmental accountability and investor expectations. It recommends mandatory disclosure guidelines, environmental policy enforcement, technological innovations, and incentive-based reforms to enhance sustainability reporting and create long-term shareholder value in Nigeria’s oil and gas sector.