International Journal of Research in Accounting, Management, and Finance
Home › International Journal of Research in Accounting, Management, and Finance
☰
✕
Vol. 11 No. 1 (2026): January - March
Articles

ESG Assurance and Greenwashing: The Effectiveness of Auditors in Validating Sustainability Reports

Download Pdf
  • Ikeogwu Sunny Nwachonimuya, Ph.D,
  • Nwajei Felix Liberty, PhD

Published 2026-03-20

Keywords

  • Array

Abstract

This study examines the effectiveness of ESG assurance in validating sustainability reports and curbing greenwashing practices among oil and gas companies in Nigeria. Specifically, the study investigates the influence of environmental sustainability reporting on greenwashing practices and assesses the impact of assurance quality on the credibility of sustainability reports. The study adopted a descriptive survey research design. The population comprised 180 employees involved in sustainability reporting, audit, compliance, and management functions within selected oil and gas companies in Nigeria. From this population, a sample of 168 respondents was drawn using a structured questionnaire. Data were collected through primary sources and analyzed using descriptive statistics (frequencies, means, and standard deviations) and inferential techniques, particularly linear regression analysis, with the aid of SPSS version 26. The findings reveal that environmental sustainability reporting has a significant influence on greenwashing practices, indicating that disclosure activities, when not properly verified, may facilitate image-enhancing narratives rather than genuine environmental accountability. Furthermore, assurance quality was found to have a significant and positive impact on the credibility of sustainability reports and plays a critical role in curbing greenwashing. High-quality assurance, characterized by auditor competence, independence, and methodological rigor, enhances stakeholder confidence and reduces misleading environmental claims. The study concludes that sustainability reporting alone is insufficient to mitigate greenwashing without robust assurance mechanisms. It therefore recommends stronger regulatory frameworks, mandatory independent ESG assurance, and enhanced auditor capacity to improve the credibility and effectiveness of sustainability reporting in Nigeria’s oil and gas sector. 

Download Pdf

References

  1. Adegbite, E., & Nakpodia, F. (2022). Corporate governance and accountability in Nigeria: Beyond box-ticking. Journal of Business Ethics, 176(2), 295–312. https://doi.org/10.1007/s10551-021-04974-9
  2. Amaeshi, K., Adegbite, E., & Rajwani, T. (2016). Corporate social responsibility in challenging and non-enabling institutional contexts: Do institutional voids matter? Journal of Business Ethics, 134(1), 135–153. https://doi.org/10.1007/s10551-014-2420-4
  3. Amel-Zadeh, A., & Serafeim, G. (2018). Why and how investors use ESG information: Evidence from a global survey. Financial Analysts Journal, 74(3), 87–103. https://doi.org/10.2469/faj.v74.n3.2
  4. Boiral, O., Heras-Saizarbitoria, I., & Brotherton, M. C. (2019). Improving environmental sustainability reporting: Why do firms seek ISO 14001 certification? Journal of Cleaner Production, 217, 469–478. https://doi.org/10.1016/j.jclepro.2019.01.233
  5. Boiral, O., Talbot, D., & Brotherton, M. C. (2022). Measuring sustainability assurance: A systematic review of practices. Journal of Business Ethics, 177(1), 95–118. https://doi.org/10.1007/s10551-021-04852-6
  6. Boiral, O., Talbot, D., & Brotherton, M.-C. (2024). Corporate greenwashing and stakeholder skepticism: A systematic review. Journal of Business Ethics, 189(2), 317–336. https://doi.org/10.1007/s10551-023-05478-3
  7. Cohen, J., & Simnett, R. (2021). CSR and assurance services: A research agenda. Auditing: A Journal of Practice & Theory, 40(2), 1–27. https://doi.org/10.2308/AJPT-2020-092
  8. Deegan, C. (2002). The legitimising effect of social and environmental disclosures – a theoretical foundation. Accounting, Auditing & Accountability Journal, 15(3), 282–311. https://doi.org/10.1108/09513570210435852
  9. Deegan, C. (2019). Financial accounting theory (5th ed.). McGraw-Hill Education.
  10. Delmas, M. A., & Burbano, V. C. (2011). The drivers of greenwashing. California Management Review, 54(1), 64–87. https://doi.org/10.1525/cmr.2011.54.1.64
  11. Eweje, G. (2006). Environmental costs and responsibilities resulting from oil exploitation in developing countries: The case of the Niger Delta of Nigeria. Journal of Business Ethics, 69(1), 27–56. https://doi.org/10.1007/s10551-006-9067-8
  12. Grewatsch, S., & Kleindienst, I. (2024). ESG engagement and stakeholder value creation: A meta-analytic review. Business Strategy and the Environment, 33(1), 128–144. https://doi.org/10.1002/bse.3457
  13. Guo, H. (2025). ESG disclosure and firm performance in the oil and gas sector: Evidence from emerging markets. Energy Policy, 188, 113631. https://doi.org/10.1016/j.enpol.2025.113631
  14. Hummel, K., Schlick, C., & Fifka, M. S. (2022). Sustainability reporting in the oil and gas industry: Review and future research agenda. Journal of Cleaner Production, 350, 131468. https://doi.org/10.1016/j.jclepro.2022.131468
  15. Ite, U. E., Ibok, U. J., Ite, M. U., & Petters, S. W. (2016). Petroleum exploration and production: Past and present environmental issues in the Nigeria’s Niger Delta. Environmentalist, 36(1), 40–57. https://doi.org/10.1007/s10669-015-9446-8
  16. Jamil, M., & Wahyuni, S. (2024). ESG reporting and the risk of greenwashing in Malaysia’s oil and gas industry. Asian Journal of Sustainability and Governance, 8(2), 45–62. https://oarep.usim.edu.my/jspui/handle/123456789/2653
  17. Jong, M. D. T., & van der Meer, M. (2017). How does it fit? Exploring the congruence between organizations and their corporate social responsibility (CSR) activities. Journal of Business Ethics, 143(1), 71–83. https://doi.org/10.1007/s10551-015-2782-2
  18. Kölbel, J., Busch, T., & Jancso, L. (2023). Can ESG ratings prevent greenwashing? Evidence from assurance practices. Accounting, Auditing & Accountability Journal, 36(7), 2103–2126. https://doi.org/10.1108/AAAJ-12-2021-5630
  19. Kolk, A. (2016). The social responsibility of international business: From ethics and the environment to CSR and sustainable development. Journal of World Business, 51(1), 23–34. https://doi.org/10.1016/j.jwb.2015.08.010
  20. Kotsantonis, S., & Pinney, C. (2024). The evolving role of assurance in ESG reporting: Enhancing credibility and trust. Sustainability Accounting, Management and Policy Journal, 15(1), 72–95. https://doi.org/10.1108/SAMPJ-06-2022-0301
  21. Lindblom, C. K. (1994, April). The implications of organizational legitimacy for corporate social performance and disclosure. Critical Perspectives on Accounting Conference, New York.
  22. Lyon, T. P., & Montgomery, A. W. (2015). The means and end of greenwash. Organization & Environment, 28(2), 223–249. https://doi.org/10.1177/1086026615575332
  23. Marques, L., Rialp, J., & Villanueva, J. (2023). Greenwashing in emerging markets: A review and research agenda. Journal of Business Research, 160, 113726. https://doi.org/10.1016/j.jbusres.2023.113726
  24. Martinez-Ferrero, J., & García-Sánchez, I. M. (2017). Coercive, normative and mimetic isomorphism as determinants of the voluntary assurance of sustainability reports. International Business Review, 26(1), 102–118. https://doi.org/10.1016/j.ibusrev.2016.05.009
  25. Michelon, G., Pilonato, S., & Ricceri, F. (2015). CSR reporting practices and the quality of disclosure: An empirical analysis. Critical Perspectives on Accounting, 33, 59–78. https://doi.org/10.1016/j.cpa.2014.10.003
  26. Nwokeji, G. U., & Okafor, C. E. (2020). Corporate social responsibility reporting and environmental sustainability of oil and gas companies in Nigeria. International Journal of Energy Economics and Policy, 10(3), 394–401. https://doi.org/10.32479/ijeep.9176
  27. O’Dwyer, B., & Owen, D. (2023). Independent assurance of sustainability reports: Progress, challenges, and future research. Critical Perspectives on Accounting, 94, 102556. https://doi.org/10.1016/j.cpa.2022.102556
  28. Okafor, A. M., Adeleye, B. N., & Adusei, M. (2021). Corporate social responsibility and financial performance: Evidence from the Nigerian oil and gas industry. Resources Policy, 73, 102187. https://doi.org/10.1016/j.resourpol.2021.102187.
  29. Okafor, A. O., Olayinka, I. M., & Uzonwanne, G. C. (2023). ESG disclosures and corporate sustainability in Africa: Evidence from Nigeria. Sustainability, 15(2), 1655. https://doi.org/10.3390/su15021655
  30. Okafor, A., & Ogbechie, C. (2023). Greenwashing and the credibility of corporate sustainability reporting in emerging economies. Journal of Cleaner Production, 385, 135746. https://doi.org/10.1016/j.jclepro.2023.135746
  31. Olayinka, M. U., & Olajide, S. O. (2021). Sustainability reporting and assurance practices in sub-Saharan Africa: Evidence from the oil and gas sector. African Journal of Accounting, Auditing and Finance, 9(4), 412–430. https://doi.org/10.1504/AJAAF.2021.118394
  32. Reimsbach, D., Hahn, R., & Gürtürk, A. (2020). Integrated reporting and assurance of sustainability information: An experimental study on professional investors’ information processing. European Accounting Review, 29(3), 477–510. https://doi.org/10.1080/09638180.2019.1677483
  33. Simnett, R., Vanstraelen, A., & Chua, W. F. (2009). Assurance on sustainability reports: An international comparison. The Accounting Review, 84(3), 937–967. https://doi.org/10.2308/accr.2009.84.3.937
  34. Suchman, M. C. (1995). Managing legitimacy: Strategic and institutional approaches. Academy of Management Review, 20(3), 571–610. https://doi.org/10.5465/amr.1995.9508080331
  35. Testa, F., Boiral, O., & Iraldo, F. (2018). Internalization of environmental practices and institutional complexity: Can stakeholders’ pressures encourage greenwashing? Journal of Business Ethics, 147(2), 287–307. https://doi.org/10.1007/s10551-015-2997-1
  36. Uwuigbe, U., Obarakpo, T., Uwuigbe, O. R., Olubukunola, R., & Asiriuwa, O. (2021). Corporate social responsibility disclosures and sustainability of oil and gas companies in Nigeria. Cogent Business & Management, 8(1), 1938937. https://doi.org/10.1080/23311975.2021.1938937
  37. Velte, P. (2024). Determinants of ESG disclosure: A systematic literature review. Journal of Cleaner Production, 415, 137918. https://doi.org/10.1016/j.jclepro.2023.137918
Journal Footer