Integrated Reporting and European State-Owned Enterprises: A Disclosure Analysis Pre and Post 2014/95/EU

Giuseppe Nicolò,Adriana Tiron-Tudor,Gianluca Zanellato

doi:10.3390/su12051908

Giuseppe Nicolò, Adriana Tiron-Tudor + Show 1 more

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https://doi.org/10.3390/su12051908

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Journal: Sustainability	Publication Date: Mar 3, 2020
Citations: 50	License type: CC BY 4.0

Affiliation: University of Salerno, Babeș-Bolyai University

Abstract

The European Directive 2014/95/EU regulating the disclosure of non-financial information for public interest organisations is enjoying its first years since entering into force in 2017. The emerging of social, environmental and sustainability issues in combination with the New Public Management (NPM) reforms, led public sector entities to huge demands of accountability. Long time before the European Union Directive (EUD) on non-financial information, public sector entities were pushed to demonstrate to a broad range of stakeholders how public resources are used. Accordingly, the stakeholders’ increasing demand for social and environmental information has encouraged the adoption of different types of reports by organisations, such as the Corporate Social Responsibility (CSR) Report, Sustainability Reporting (SR) and the Integrated Report (IR).In the context of State-Owned Enterprises (SOEs), the disclosure of non-financial information gains a pivotal relevance as these type of organisations face a more comprehensive range of stakeholders than private organisations. In this vein, the present paper aims to investigate whether the mandatory disclosure directive increased the level of information provided by SOEs issuing an IR between the years 2016 and 2017 in order to demonstrate whether a mandatory regulation leads to higher disclosure.

Highlights

In recent years, global financial crises, accounting scandals, environmental accidents and employees’ matters have progressively increased the concerns of investors and stakeholders [1,2]
The stakeholders’ increasing demand for social and environmental information has encouraged the adoption of different types of reports by organisations, such as the Corporate Social Responsibility (CSR) Report, Sustainability Reporting (SR) and the Integrated Report (IR).In the context of State-Owned Enterprises (SOEs), the disclosure of non-financial information gains a pivotal relevance as these type of organisations face a more comprehensive range of stakeholders than private organisations
The study provides two-fold contributions to the existing literature. It provides a general overview of the state of the art of IR disclosure in the context of SOEs assessing the Global Reporting Initiative (GRI) framework adoption and assessing if sampled IR adopters are mentioning Sustainable Development Goals (SDGs). It examines the effect of mandatory non-financial disclosure requirements (EUD) on the level of IR disclosure provided by SOEs

Summary

Introduction

Global financial crises, accounting scandals, environmental accidents and employees’ matters have progressively increased the concerns of investors and stakeholders [1,2]. The introduction of the 17 Sustainable Development Goals (SDGs) by the United Nations in 2015, aiming to create sustainable development for the future [5], further developed social expectations surrounding states and private organisations alike. Non-financial disclosure has gained momentum as a vehicle to improve transparency and accountability [2,6], especially in the SOEs context, where the existence of multiple stakeholders with multifarious interests has created considerable pressures [7,8]. The blurred lines of ownership and accountability these organisations face [9] render the development of non-financial reporting in these organisations interesting for scholars and practitioners alike, as such organisations are providing public value by acting as private organisations [8]. With the awareness of its pivotal relevance, in the last decades the European Union has initiated a process of harmonisation of non-financial information, culminated in the Directive 2014/95/EU (EUD), which established mandatory disclosure of non-financial matters as policies, risks, and outcomes on environmental matters, social and employee-related aspects, respect for human rights, anti-corruption and bribery issues, and diversity on boards of directors, for entities of public interest with more than 500 employees starting from 2017 [10]

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