The impact of environmental performance of oil and gas companies on their fi nancial performance

Abstract

Oil and gas companies are under the scrutiny of investors and counterparties, among which today there is a growing commitment to complying with environmental management criteria and socially responsible investment and development. This study is devoted to the analysis of the impact of environmental management criteria on the financial performance of oil and gas companies. Compliance with the principles of environmental management contributes to the stable development of companies in the oil and gas sector and increases the attractiveness for investors. Regression analysis of panel data covering 2002–2020 was performed on the basis of assessments of compliance with environmental management within the framework of the ESG rating. The novelty of the study lies in the high detail of the data, the focus on oil and gas companies in developed and emerging economies, and taking into account the specific characteristics of the sample. The analysis of compliance with the principles of environmental management, as part of the ESG strategy, in companies in the oil and gas sector complements the results of broader studies of the energy sector. The purpose of the study is to study the relationship between environmental management criteria and the financial performance of oil and gas companies, in particular their market value (Stock Return, Tobin’s Q) and accounting financial indicators (ROA, ROE).The practical significance of the work lies in the formulation of conclusions about the impact of environmental management criteria on the success of oil and gas companies. The results of the study are useful in making strategic decisions by companies in the industry under study and can also be used by investors when choosing assets to form an investment portfolio.