Environmental activities and its implications on the profitability of oil companies in Nigeria

The study examines the cost implications of environmental activities on the profitability of oil companies. Data for the study were collected from the internal management report and analyzed using the ordinary least square (OLS) method. The results revealed that there is a significant relationship between environmental activities and profitability. Proper management of environmental activities is therefore desirable if organizational profitability is to be sustained. It was recommended that Nigeria petroleum companies should show data on environmental expenditure, environmental cost charged to income in the account as well as details in the notes to the accounts. To enhance the effectiveness of the policy, separate accounts should be opened for environmental expenditures in order to facilitate the measurement and reporting of environmental expenditures and environmental performance of each company as well as the whole sector.