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Title page

Approval page




Table of content



1.1        Background of the study

1.2        Statement of problem

1.3        Objective of the study

1.4        Research Hypotheses

1.5        Significance of the study

1.6        Scope and limitation of the study

1.7       Definition of terms

1.8       Organization of the study




3.0        Research methodology

3.1        sources of data collection

3.3        Population of the study

3.4        Sampling and sampling distribution

3.5        Validation of research instrument

3.6        Method of data analysis



4.1    Introductions

4.2    Data analysis


5.1    Introduction

5.2    Summary

5.3    Conclusion

5.4    Recommendation
















Militancy of Host communities has always being a threat to the growth of Nigeria’s Oil and Gas Industry. In other to resolve the issue of militancy oil companies engages in corporate social responsibilities to cater for the needs of the people and the environment. The question of does these expenses have effect on the performance of the companies is the main purpose of this study, the study will be anchored on the agency theory. The study shall adopt both qualitative and quantitative research approach for the study as data for the study is from both primary and secondary source. The study adopt the survey research design because it allow for information to be extracted from large population, the method of data analysis for the study is the simple percentage and regression analysis. The researcher shall use SPSS software to run the analysis for the study. At the completion of the study the researcher recommends that management of Nigerian oil and gas firms should consider CSR and CSRD as an investment which pays off subsequently.

Keywords: CSR, CSRD oil and gas, financial performance, disclosure


                                        CHAPTER ONE


1.1 Background of the study

The traditional concern of business organisations is to focus on strategies for business operations and profit maximization through diversification, product differentiation and globalization. However, the evolution of strategic thinking underscores the need to include activities that seek to integrate social and environmental issues into business decision making process. In addition, oil and gas firms in recent years are facing increasing pressures from their stakeholders to address and disclose social and environmental responsibilities. As a result, Corporate Social Responsibility Disclosure (CSRD) has increased over the years. Elkington (2007) notes that CSRD has been developed to extend the traditional model of financial reporting, which emphasizes a firm’s economic prosperity to accommodate social and environmental dimensions. Corporate social responsibility disclosure is a medium through which business organizations provide information to stakeholders about their corporate activities in the society. These activities may include environmental and ecological issues, employee welfare, energy, community involvement and product/consumer related matters. Mathews (2013) describes CSRD as voluntary disclosures of information, both qualitative and quantitative, made by organizations to inform or influence a range of audiences. The quantitative disclosures may be in financial or non-financial terms. This contemporary time is witnessing a change from profit maximization to an era of social responsibility, which makes most managers of business concern to go beyond the simple prospect of money making to taking cognizance of the effect of organizational activities on the stakeholders of an organization. This change in business philosophy brought about corporate social responsibility (CSR), which was described by the World Business Council for Sustainable Development (WBCSD) as a contribution to sustainable economic development. Chandler (2001) disclosed that CSR is the translucent business practices that are based on ethical values, compliance with legal requirements and respect for the people – communities and other components of the environment. CSR is an obligation, beyond that required by the law and economics, for a firm to pursue long term goals that are good for society (Folajin, Ibitoye & Dunsin, 2014). In the same vein, Bhattacharya, Korschun and Sen (2009) stated that CSR makes business organizations to consider the interest of society by taking responsibility for the impact of their activities on stakeholders (customers, suppliers, employees, shareholders, communities) as well as the environment. The result of which strengthens the relationship of business concerns with different stakeholders, ensure minimum conflicts and maximum loyalty from all stakeholders of the corporation (Imran, Kashif, Syed, Jamil & Maria, 2010). The performance of an organization is a function of both factors internal and external to such entity, mid such elements is the immediate community in which the entity is situated which are always at disquiet about the effects of the organization’s operation on their immediate environment most especially the communities that host extractive and mining industries. In a nutshell, the negative effect of such activities always cause cacophony between host community and such organization, so in other to resolve the bone of contention, the stakeholder’s theory propounded by freeman, advocated that organization should not be shareholders focused but stakeholders focused and this later eventually brought the idea of social responsibility, which makes organization to be social responsible to the entire public that defines its environment rather than only the owners of such entity. Financial reporting is often criticized for its focus on historic, quantitative and short-term performance, rather than on long-term value creation. Corporate reporting based only on accounting standards allows companies to externalise environmental and social costs due to the fact that financial results are not placed within the context of the greater economy, society or the environment in which the business operates (Terry, 2008). According to Eccles and Krzus (2010), 984 traditional corporate reports are increasingly less relevant and useful for analysts and investors as they are difficult for even the most sophisticated users to understand. The users of financial information today, need the data that would allow them to assess whether the entity is environmentally, socially and financially responsible. It is expected that businesses should do more than simply turn in financial statements in line with the accounting standards. They are expected to operate in a manner that is socially and ethically responsible as well as minimize negative impacts on the environment. They should also contribute positively to the community where they operate by taking into consideration the varied needs of their stakeholders. Currently, in most jurisdictions around the world, the minimum requirement is the inclusion of significant non-financial information in company reporting. The Global Reporting Initiative (GRI), launched in 1997, has taken the lead in delineating a global disclosure framework for corporate social responsibility and sustainability. KPMG (2015) shows that the Global Reporting Initiative (GRI) remains the most popular voluntary reporting guideline worldwide, with 60 percent of all CSR reporters in the 45 countries surveyed referencing the GRI. This is roughly stable with the 2013 rate (61 percent). For stand-alone Corporate Responsibility (CR) reports the GRI application rate is at 72 percent (2013: 74 percent). The GRI reports by region for 2015, show GRI application in USA of about 69 percent, whilst Middle East and Africa show lower GRI rates about 50%.

However, noticeable gap still exists in literature on CSRD and the financial performance of listed oil and gas firms in Nigeria. However, efforts to determine the impact of CSRD on profitability have not yielded uniform empirical results. For instance, Alexander & Buchholz (2008) Oba (2009) and Olayinka & Temitope (2011) report positive relations between CSRD and financial performance. In addition to the absence of consensus on the findings from available studies, there is there is a dearth of empirical studies on the impact of CSRD of Financial performance of listed oil and gas firms in Nigeria.


For oil and gas to succeed financially, they must have to produce goods that could enable them generate sufficient profits. Profits making is a function of so many factors, some of which are indigenous and others exogenous. Amongst the exogenous factors are operational interruption caused by hosting community of the oil and gas. This is due to the concern of the community over negative and potential negative effects that businesses brought to the community. The effect ranges from environmental degradations to societal conflicts as a result of the businesses‟ activities. In an effort to overcome the existing conflicts between oil and gas and the hosting environments the idea of CRS was advocated. While that can be considered as a welcome development that avenue for conflicts resolution exists, but the avenue creates more concern over the implementation, disclosure and the quantification of the benefits to both the community and the company. Against the above backdrop, there is every need to examine and evaluate the effect of corporate social responsibility disclosure and financial performance of oil and gas firms in Nigeria.



The study has two main objectives; the general objective of this study is to examine the effect of corporate social responsibility disclosure and financial performance of oil and gas firms in Nigeria, the specific objectives are:

  1. i) To examine the effect of corporate social responsibility disclosure on the financial performance of oil and gas firm in Nigeria.
  2. ii) To ascertain if there is any significant relationship between corporate social responsibility disclosure and the financial performance of oil and gas firms in Nigeria.

iii) To explore the impact of corporate social responsibility disclosure on shareholders wealth

  1. iv) To evaluate whether environmental expenditure significantly affect financial performance of oil and gas in Nigeria


The following research questions were formulated by the researcher to aid the completion of the study;

  1. i) Does corporate social responsibility disclosure has any effect on the financial performance of oil and gas firm in Nigeria?
  2. ii) Is there any significant relationship between corporate social responsibility disclosure and the financial performance of oil and gas firms in Nigeria?

iii) Does corporate social responsibility disclosure has any impact on shareholders wealth?

  1. iv) Does environmental expenditure significantly affect financial performance of oil and gas in Nigeria?


The following research hypotheses were formulated by the researcher to aid the completion of the study; the hypotheses were stated in null and alternate form;

H0: there is no significant relationship between corporate social responsibility disclosure and the financial performance of oil and gas firm in Nigeria.

H1: there is a significant relationship between corporate social responsibility disclosure and the financial performance of oil and gas firm in Nigeria.

H0: corporate social responsibility disclosure has no impact on shareholders wealth

H2: corporate social responsibility disclosure has impact on shareholders wealth


It is believed that at the completion of the study, it will serves as a pioneering effort in evaluating the effect of CRS disclosure on the financial performance of oil and gas firms in Nigeria. The study will also be of great importance shareholder who are the financiers of the business as the study will reveal the long run benefit of CSR and disclosure will give the investors confident on the management team. It would assist government in settling conflicts and disputes between companies and the hosting environment. This could be possible by coming up with an acceptable benchmark as to what should be expended for CRS to the hosting community. The study should serve as a reference point to those that want to research further into the area. It would enable them have more insight into the subject matter under study.


The scope of the study covers corporate social responsibility disclosure and financial performance of oil and gas firms in Nigeria. In the course of the study, there were factor that limit the scope of the study;

  1. a) AVAILABILITY OF RESEARCH MATERIAL: The research material available to the researcher is insufficient, thereby limiting the study
  2. b) TIME: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.
  3. c) Organizational privacy: Limited Access to the selected oil and gas firm makes it difficult to get all the necessary and required information concerning the activities



Corporate social responsibility (CSR, also called corporate sustainability, sustainable business, corporate conscience, corporate citizenship, conscious capitalism, or responsible business) is a type of international private business self-regulation


CSRD is the process of communicating the social and environmental effects of organizations’ economic actions to particular groups within society and to society at large.

Financial performance

Financial statements are formal records of the financial activities and position of a business, person, or other entity. Relevant financial information is presented in a structured manner and in a form which is easy to understand

Oil and gas

The oil and gas sector is a global powerhouse using hundreds of thousands of workers worldwide and generating hundreds of billions of dollars globally each year.


A firm is a business organization—such as a corporation, limited liability company (LLC), or partnership—that sells goods or services to make a profit


This research work is organized in five chapters, for easy understanding, as follows

Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study. Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding.  Chapter five gives summary, conclusion, and recommendations made of the study



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