Differential reporting of social and environmental disclosures between local and foreign oil companies in Nigeria

Abstract

Purpose This study aims to identify the differences between local and foreign companies’ social and environmental disclosures (SEDs) practices operating in the Nigerian oil sector. It aims at distinguishing SED levels by comparing local and foreign companies operating in the oil sector. Design/methodology/approach The paper analyses annual reports through content analysis. SED extent and type are measured by the number of sentences. SEDs are further classified into three subcategories according to whether they are negative, neutral or positive disclosures and then their proportions are compared through descriptive analysis. To better understand SED differences, the Kruskal–Wallis and Mann–Whitney–Wilcoxon tests are used. Findings Local companies are found to provide more content and a wider variety of SED than foreign companies. The majority of the total SEDs in both local and foreign companies are positive with very little evidence of negative news. Research limitations/implications The measurement of SEDs focuses on only annual reports, without consideration of other disclosure media such as standalone reports and corporate websites. SEDs are assumed to be voluntary for the companies and they may choose not to disclose any information in annual reports, as there are no regulations or disclosure guidelines in Nigeria to be followed. Originality/value The main contribution of this study lies in identifying the factors that have led to diversity and uniqueness in SED between local and foreign oil companies. As such, this study seeks to contribute to the development of understanding multiple factors that could give rise to changing patterns of SED.

Emerging phenomenon of corporate social and environmental reporting in China

“…Similarly, previous empirical studies Deegan and Gordon (1996), Hackston and Milne (1996), Deegan and Rankin (1996), Harte and Owen (1991), Cho et al (2010), andOdera et al (2016) found that companies used CSER as a tool to improve their company image by selectively disclosing positive social and/or environmental information and little or no negative information. In this study, some participants also revealed that their companies never disclosed negative information in their CSR reports.…”

Corporate social responsibility reporting of international oil companies in Nigeria

“…Content analysis refers to the process of making inferences based on objective coding of information. One of the major strengths of this type of analysis is its generalizability given that it uses voluminous numerical data to establish significant relationships (Odera et al , 2016). Annual reports were chosen to measure CSRR since they are formal public documents produced by companies and are the most accessible source of information for listed companies.…”

“…Abdo & Aldrugi (2012) state that differences in the nature of the CSRR depends on the company's country of ultimate ownership. Alternatively, it could be argued that the very nature of internationalisation, by companies of any nationality, leads to an increase in CSRR (Odera et al, 2016). Country context and type of industry have an impact on their reports in terms of their CSRR styles (Islam et al, 2011).…”

“…Organizations that operate in a foreign country may copy CSSR practices that are prevalent in that foreign country as they may want to access certain benefits by emulating or mimicking their reporting practices (Nwobu, 2017). It could be argued that the very nature of internationalization, by companies of any nationality, leads to an increase in CSRR (Odera et al , 2016).…”

“…CSRR has gained significant prominence in the business world over the past few decades (Singh et al , 2017). Some attention has been given to analyzing what and how companies report on particular issues and the quality of that reporting (Odera et al , 2016). As organizations respond to the increasing concerns about social and environmental issues by producing CSRR, a lack of standardized reporting and an ambiguity in interpretation of the reports results in consistency of their disclosures (Ong, 2016).…”