Effect of Sustainability Disclosures on Firm Value of Listed Oil and Gas Companies in Nigeria

As global awareness of environmental and social issues grows, investors are increasingly looking to sustainability practices as indicators of long-term corporate value, particularly in high-impact industries like oil and gas. This study examines the impact of sustainability disclosures specifically, environmental, social, and governance (ESG) reporting—on the firm value of listed oil and gas companies in Nigeria. Using a quantitative approach, the study employs panel data from 10 publicly listed Nigerian oil and gas firms over a ten-year period (2014-2023). Descriptive statistics, correlation analysis, and a series of post diagnostic test including multicollinearity, heteroskedasticity, Hausman, Modified Wald, and serial correlation tests were conducted to ensure robustness of the model and accuracy of the regression results. A panel-corrected standard errors (PCSE) regression was used to analyze the effect of each sustainability disclosure (environmental, social, and governance) on firm value while controlling for firm size and age. The findings reveal that sustainability disclosures positively influence firm value, with governance disclosures showing the most substantial effect, followed by environmental and social disclosures. In light of these findings, the study recommends that Nigerian regulatory bodies consider implementing mandatory, sector-specific ESG reporting guidelines for the oil and gas industry to standardize disclosure practices and meet investor expectations. Additionally, firms are advised to prioritize transparency in governance and environmental practices as part of their corporate strategy to improve valuation and attract sustainable investments, demonstrating that comprehensive sustainability reporting can enhance firm value by aligning corporate practices with global sustainability standards.