Abstract
This paper explored the effects of new regulation on the disclosure of NFI in two European countries, Italy and Spain. The method used to develop the analysis is mainly qualitative. Content analysis was performed to verify the sustainability indicators disclosed by Italian and Spanish companies, listed on the FTSE MIB and IBEX 35 Indexes, before and after the Directive’s publication and implementation in national legislation. The level of NFI disclosure was scored using a disclosure index. The comparative analysis found a progressive reduction in disclosure levels for Italian companies compared with Spanish companies, for which an expansion of the disclosure was detected. Moreover, a reduced gap between the quantity of NFI reported in the two countries was found. This is one of the few studies to use a 3-year longitudinal analysis to investigate the EU Directive’s impact at the cross-country level.
Highlights
Over the last few years, the European Commission has undertaken several initiatives aimed at reducing the shortcomings of voluntary reporting on social and environmental issues, which often offers an unbalanced, little transparent, low-quality, incomparable, and even misleading picture of the company (Boiral 2013; Diouf and Boiral 2017; García-Sánchez and Araújo-Bernardo 2020)
This study aimed to investigate the effects produced by the new nonfinancial information (NFI) regulation focusing on two European countries, Italy and Spain
Changes in disclosure levels were examined by constructing a disclosure index based on the quantity of Global Reporting Initiative (GRI) indicators disclosed by the sampled companies in their nonfinancial reports
Summary
Over the last few years, the European Commission has undertaken several initiatives aimed at reducing the shortcomings of voluntary reporting on social and environmental issues, which often offers an unbalanced, little transparent, low-quality, incomparable, and even misleading picture of the company (Boiral 2013; Diouf and Boiral 2017; García-Sánchez and Araújo-Bernardo 2020). Had already envisaged the mandatory drafting of social reports for certain types of companies, numerous studies have shown a low propensity to voluntarily disclose social and environmental information and limited experience in the field of sustainability reporting (Mio and Venturelli 2013; Venturelli et al 2017; Doni et al 2019) These premises highlight, on the one hand, the potential contribution of the EU directive to NFI disclosure in Italy (Venturelli et al 2019) and, on the other hand, the great difficulty that Italian companies could face in implementing the new requirements (Doni et al 2019). This law incorporated the EU Directive into Spanish legislation by raising the level of rigorousness and transparency of NFI to be disclosed (Montesinos and Brusca 2019)
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