There is an increased awareness of the impact of organizational activities on the environment. Companies are facing pressures to demonstrate responsibility towards the environment; in responding to these pressures companies make disclosures on environmental impact of their activities. This studyaimed at using a disclosure index tailored to assess what is disclosed, the form in which it is disclosed, where it is disclosed in the annual report and whether the disclosure is seen as voluntary or compulsory information. The study is unique as it assesses environmental disclosures in the oil and gas industry in Nigeria using annual reports alone as it is the chief information document of any company that can be used to communicate to it stakeholders. The findings from the study points to the fact that Oil and Gas companies operating in Nigeria pays little or no attention to the disclosure of information relating to the environmental impact of their operations in their annual reports. The information reported are mostly general in nature usually relating to the companies stands on health, safety and environment which are not useful to stakeholders. The study recommends among others that the stock market regulator should state as part of listing requirement, the disclosure in annual reports of environmental information relating to a company’s operation. As the whole world is going green, enlightened investors feel morally bound to only invest in companies with green initiatives.
Climate change is the key factor influencing environmental disclosure by companies. The effect of economic activities has implication on the environment; companies especially in the oil and gas industry are prone to activities impacting negatively on the environment. An increased awareness of the impact of organizational activities on the environment and the understanding that organizational success does not only rest on profitability contributed to the demand for environmental disclosures by users of financial reports.
In order to bridge the gap between the needs of users of financial information arising from this new challenge and the present states of financial reporting, the accounting profession started
persuading companies to link environmental practice with good business practice (Carey, 1992). The Institute of Chartered Accountants in England and Wales (ICAEW) champion this course which became paramount in the 1990s with their collaboration with the business community aimed at encouraging the disclosure of environmental information.[email protected]
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