Environmental justice and return on assets of listed oil and gas companies: empirical evidence from Nigeria

Studies have shown that robust returns on assets and efficient resource management are reflections of corporate competence, however, when management negates the essence of environmental justice and protection, in course of business operations, the going concern of such entity is greatly endangered. There is an ongoing debate concerning the uncertainties, environmental injustice, and non-compliance attitude of the majority of environmentally sensitive companies particularly in the upstream sector. Consequently, this study investigated environmental justice and returns on assets of the oil and gas companies. Expo factor was employed using a population of twelve oil and gas operators listed on Nigeria Stock Exchange. Three companies operating in the upstream segment of the downstream industry were selected using the purposive sampling technique. Published financial statements of the sampled companies for the period 2003-2018 form the source of data. The validity and reliability of the data were premised on the scrutiny of the external auditors. Descriptive statistics and panel data regression were used while diagnostic tests of Hausman, Breusch-Pagan/Cook-Weisberg test for heteroscedasticity, and multicollinearity tests were carried out. The study found that environmental justice had a statistically positive significant effect on return on assets (AdjR2= 0.17, F-Stat. (3, 44) =16.63; P-value=0.00 < 0.05). The study recommended that managements’ quest for high investment returns should be aligned with environmental justice for host communities and environmental protection of the planet earth’s the peaceful coexistence of all the inhabitants.