Research Objectives: This work empirically assesses the influence of Environmental Costs on financial performance of listed oil and gas firms’ in Nigeria. Specifically, the objectives of the study includes to: examine the effect of the corporate social responsibility cost on earning per share of oil and gas firms in Nigeria, determine the influence of employee health and safety cost on earning per share of oil and gas firms in Nigeria and ascertain the influence of environmental law compliance and penalty on earning per share of oil and gas firms in Nigeria.
Methodology: To achieve this objective, the study made use of financial reports of oil and gas companies quoted in the Nigeria Stock Exchange market from years 2012-2022. The research design used is Ex Post Facto design and data for the study were obtained from the published annual financial reports of five selected oil and gas firms spanning from 2012-2022. In order to determine the effect of environmental costs on firms performance, some key proxy variables were used in the study, namely Donations and charitable contributions, Employee welfare benefit and Environmental laws compliance and penalty; firms’ performance is however represented by Earnings per Share. Three hypotheses were formulated to guide the investigation and the statistical test of parameter estimates was conducted using multiple regression models.
Findings: The findings generally indicate that Donations and charitable contributions, Employee welfare benefit and Environmental laws compliance and penalty have significantly influenced firms’ performance.
Conclusion: The implication based on the findings is that the environmental costs have positively influenced the oil and gas firms’ financial performance over the years.
Recommendations: The study however suggests that firms should disclose more of this information in their annual reports in order to legitimize their operations by making public knowledge about her commitment of business to sustainable economic development, the local communities and working with employees.
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