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

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.