Green Financing and Financial Sustainability of Quoted Oil and Gas Firms in Nigeria: An Application of the Fixed Effects Model (Fe)

Given renewed efforts at managing the eco-system, there is need to examine how deploying funds towards environmentally friendly projects can help firm build financial capacity to generate income, manage risks and maintain profitability over a long term as against short-term to ensure solvency, efficiency and adapt to economic dynamics. This study explores a panel fixed effect model on how green financing within the oil and gas sector can enable firms maintain financial health and meet long-term obligation. Green financing is captured by carbon credit, green investment, green management function and green bonds as explanatory variables, while financial sustainability of the studied quoted firms on the Nigeria Exchange Group Limited (NGX) is measured by ratio of profit after tax relative to the firm’s operating costs. The study utilized longitudinal and cross-sectional surveys to analyse trends and cause effect of the panel data obtained from the Nigeria Exchange Group Limited for the periods 2014–2023 on ten (10) oil and gas firms quoted on the exchange. The result, revealed that carbon credit, green investment and bonds correlates negatively with financial sustainability, while green management function impacts positively and significantly enhanced financial health of the studied firms. Also, our fixed effects model revealed significant joint influence of green financing on financial sustainability. Based on these revelations, it is suggested that the government should come up with policy measures design to partner/collaborate with or offer incentives to oil and gas sector in order to defray the huge environmental compliance costs that impede short term profitability. The Federal Government of Nigeria's green finance initiatives should be embraced and adopted by Nigeria's oil and gas industry in the light of this revelation, this is so because green investment opportunities guarantee protection of the environment and help firms build reputation. Government expenditure on critical infrastructures need to be emphasized or prioritized alongside long-term financing options that will make transitioning to sustainable initiatives smooth, attractive and less difficult.