This paper looks at the topic of regulation of integrated reporting for listed companies, with the aim of contributing to the debate on the usefulness of introducing a mandatory regime, both from the perspective of integrated performance sustainability of companies and from that of relevance of information for providers of financial capital. The study is based on empirical research carried out on a sample composed of companies operating in territories where the adoption of integrated reporting is voluntary (Europe) and those operating in a country where adoption is mandatory (South Africa). The research shows that (a) in voluntary regimes, levels of integrated performance achieved by companies are higher; (b) mandatory regulation produces positive effects on integrated performance levels in the medium term; (c) integrated performance indicators are value-relevant, though having different levels of relevance under the two regimes examined.
European companies of public interest requested to comply with the Directive 2014/95/EU on Non-Financial Information (NFI) are allowed to fulfil the regulatory obligation following the Global Reporting Initiative (GRI) guidelines, which constitute at present the most widely spread framework for sustainability reporting. Given such prevalence, this paper examines the level of disclosure on Key Performance Indicators (KPIs) and its relationship with financial performance over the period 2016–2018 for Italian-listed companies adopting GRI guidelines to convey NFI under the Decree 254/2016. The research applies content analysis of the annual and sustainability reports to measure the disclosure index on KPIs, and Data Envelopment Analysis (DEA) to estimate the financial performance. A Tobit-regression model explores the nexus between financial performance and companies’ disclosure. Findings show a decrease in the disclosure levels in the early adoption of mandatory NFI and a significant association with the financial performance of the sampled companies. The study, assuming a comprehensive view of the financial indicators, improves our knowledge of the relationship between sustainability disclosure and financial performance and adds to the literature on the evolution of NFI in the transition from voluntary to mandatory regime.
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