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IMPACT OF ENVIRONMENTAL SUSTAINABILITY REPORTING ON NET PROFIT MARGIN OF SELECTED QUOTED GAS INDUSTRIES IN NIGERIA

Adekanmbi, John Ayodele (Ph.D)

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Abstract

The study examined the impact of environmental sustainability reporting on net profit margin of quoted and selected gas industries in Nigeria. Specifically, the study examined the sustainability environmental costs (community development cost, waste management cost, expenses for employee health and safety and cost for research and development) on net profit margin of oil and gas and manufacturing firms in Nigeria. It was a quantitative study and secondary data sourced from the published quoted financial reports of 10 sampled firms with life span of 20 years. Data were analysed using descriptive statistics, Pearson correlation, unit root test, panel regression with regards to pooled Ordinary Least Square (OLS) estimation, fixed effect estimation, two-ways fixed effect estimation, random effect estimation and other position estimation tests which include restricted F-test, Hausman test, Wald test of heterogeneity, Pearson test of cross-sectional dependence and Wooldridge test. It was discovered that community development cost has a positive insignificant effect on net profit margin. The finding further revealed that environmental cost has a statistical positive relationship with the performance of firms in the gas industries in Nigeria. The study recommended that Environmental cost should be seen as an asset that will generate more income for the organisation. This will not just improve the development of the community, but it will also enhance the overall performance of the organisation.

Keywords: net profit margin, sustainability, environmental costs/reporting, gas industries