An Examination of the Impact of Sustainability Reporting on Investor Decisions: A Study of Seplat Energy Plc
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Background of the Study
Sustainability reporting, which discloses a company’s environmental, social, and governance (ESG) performance, has become a critical factor in investor decision-making. Investors increasingly demand transparency about how companies manage their impact on society and the environment, recognizing the link between sustainability practices and long-term financial performance (Ogunleye & Adebayo, 2024).
Seplat Energy Plc, a leading Nigerian oil and gas company, operates in a sector under significant scrutiny for its environmental and social impact. The company has embraced sustainability reporting, highlighting its efforts in reducing carbon emissions, community development, and governance reforms. This study explores the influence of Seplat’s sustainability disclosures on investor decisions, contributing to the growing body of knowledge on ESG factors in investment in emerging markets like Nigeria.
Statement of the Problem
Despite the global trend of integrating ESG factors into investment decisions, sustainability reporting is still at a nascent stage in Nigeria. Many companies, including those in the oil and gas sector, face challenges such as inconsistent reporting standards and a lack of investor awareness. Seplat Energy Plc has been proactive in publishing sustainability reports, but the extent to which these reports influence investor decisions remains unclear.
This study examines the relationship between sustainability reporting and investor behavior, using Seplat Energy Plc as a case study. It seeks to understand whether transparent ESG disclosures have a measurable impact on investor confidence and decision-making (Ajayi & Okafor, 2023).
Objectives of the Study
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To evaluate the impact of Seplat’s sustainability reporting on investor decisions.
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To identify key ESG factors that influence investment choices in the Nigerian oil and gas sector.
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To provide recommendations for improving the effectiveness of sustainability reporting in Nigeria.
Research Questions
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How does Seplat’s sustainability reporting influence investor decisions?
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What ESG factors are most critical in shaping investment choices in the Nigerian oil and gas sector?
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How can sustainability reporting practices in Nigeria be enhanced to attract investors?
Research Hypotheses
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Sustainability reporting significantly influences investor decisions at Seplat Energy Plc.
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Environmental and governance factors are more influential than social factors in shaping investor decisions.
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Improved reporting standards and transparency enhance the effectiveness of sustainability reporting.
Scope and Limitations of the Study
The study focuses on Seplat Energy Plc’s sustainability reporting and its influence on investor decisions from 2015 to 2025. It uses financial statements, ESG reports, and investor feedback as data sources. Limitations include the subjective nature of investor preferences and the availability of comprehensive ESG data in Nigeria.
Definition of Terms
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Sustainability Reporting: The disclosure of a company’s performance in environmental, social, and governance (ESG) areas.
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Investor Decisions: The process through which investors choose to allocate resources based on financial and non-financial factors.
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Seplat Energy Plc: A Nigerian energy company focused on oil and gas exploration and production, listed on the Nigerian Exchange Group and the London Stock Exchange.
