Does environmental and social disclosure foretell the financial performance of oil and gas behemoths? Evidence from the emerging market using mixed-methods research

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Abstract

Focusing on the sustainability disclosure of Indian oil and gas (O&G) behemoths, this study pursues two pertinent research objectives: 1) to investigate the relationship between environmental and social disclosures and corporate financial performance (CFP) metrics; 2) to conceptualize and thematically identify “fault lines” as areas of extreme vulnerability, for example, carbon emissions and groundwater depletion, created due to an intersection of adverse environmental and social impacts of the O&G sector (Alagoz, 2023). A mixed-methods research approach is employed, with panel data regression analysis addressing the first research objective, thus validating the hypotheses on relationships between social and environmental disclosure, and CFP metrics. For the second research objective, Braun and Clarke’s (2012) six-step reflexive thematic analysis (RTA) technique is applied to identify sustainability reporting themes that correspond to the conceptualization of “fault lines”. Data analysis provides partial and inconclusive evidence for sustainability disclosure metrics predicting CFP. Therefore, financial analysts and investors are advised to not rely on sustainability disclosure metrics as a bellwether for the financial performance of O&G companies. For the second research objective, three reporting themes — circular economy, climate change, and water stewardship — are identified as characterizing the “fault lines”. Implications of this for socio-economic-environmental policy-making and the elusive global north-south consensus on environmental action are discussed.

Keywords: Environmental and Social Disclosure, Mixed-Methods Research, Reflexive Thematic Analysis, Indian Oil and Gas Behemoths

Authors’ individual contribution: The Author is responsible for all the contributions to the paper according to CRediT (Contributor Roles Taxonomy) standards.

Declaration of conflicting interests: The Author declares that there is no conflict of interest.

JEL Classification: C120, I310, M140, Q200, Q560

Received: 08.05.2024
Accepted: 14.10.2024
Published online: 17.10.2024

How to cite this paper: Kumar, R. (2024). Does environmental and social disclosure foretell the financial performance of oil and gas behemoths? Evidence from the emerging market using mixed-methods research. Corporate Governance and Sustainability Review, 8(2), 48–60. https://doi.org/10.22495/cgsrv8i2p4