Does environmental disclosure pay? Panel evidence on profitability and market valuation in major oil companies, 2015-2024

This study examines whether environmental disclosure is associated with accounting performance and market valuation in large oil and gas companies. It uses a balanced panel of five integrated firms (Shell, ExxonMobil, PetroChina, Chevron, and BP) observed from 2015 to 2024 (50 firm-year observations), an index of 12 disclosure items, and three performance measures: return on equity (ROE), return on assets (ROA), and Tobin’s Q. Fixed-effects models are estimated with Driscoll-Kraay and panel-corrected standard errors, and a wild cluster bootstrap is the main inference procedure given the small number of firms. Disclosure shows no robust association with ROE or ROA. Its association with Tobin’s Q is positive (coefficients of 0.31 to 0.44) under several specifications but is fragile: it loses significance when firm size is excluded, disappears with lagged disclosure, and is not supported by cointegration tests, while causality tests indicate that Tobin’s Q precedes disclosure. The evidence is therefore indicative of a partial, specification-dependent association, not of a causal effect.