GREEN FINANCE AND ENVIRONMENTAL SUSTAINABILITY OF QUOTED OIL AND GAS FIRMS IN NIGERIA

Abstract

This study examined the effect of green finance on the environmental sustainability of quoted oil and gas firms in Nigeria. The study adopted an ex-post facto research design and covered the period from 2014 to 2023. Secondary data were obtained from the annual and sustainability reports of the sampled firms, the Nigerian Exchange Group (NGX), the Central Bank of Nigeria (CBN) Statistical Bulletin, the Nigerian National Petroleum Company Limited (NNPCL) and the Securities and Exchange Commission (SEC). The relationship between green finance and environmental sustainability was analysed using a panel data regression framework based on a Random Effects model. Environmental sustainability served as the dependent variable, while carbon credit, green investment, green management functions and green bonds were employed as proxies for green finance. The findings revealed that the overall model was statistically significant (F-statistic = 9.144461, p < 0.01) and explained approximately 54.53% of the variation in environmental sustainability (R² = 0.545304). The results further showed that carbon credit exerted a positive and statistically significant effect on environmental sustainability, whereas green management functions, green bonds and green investment had effects that were not statistically significant. The study concludes that although green finance has the potential to enhance environmental sustainability, its impact among quoted oil and gas firms in Nigeria remains uneven, with carbon credit emerging as the most effective green finance instrument. The study therefore recommends that policymakers should strengthen carbon credit frameworks and expand incentives for green financing in order to encourage greater investment in environmentally sustainable projects within the oil and gas sector.