Assessment of the Mandatory Non-Financial Reporting of Romanian Companies in the Circular Economy Context

Abstract

Between the circular economy and corporate social responsibility, there is an ever-closer connection. Non-financial reporting of social responsibility actions is based on the circular economy concept, so reporting contributes to increasing the level of disclosure of circular strategies. In this context, large companies are required to report non-financial information to understand their activities better. The paper’s objective is to assess the mandatory non-financial reporting of Romanian companies active in the non-financial sector for 2017–2019. The empirical analysis consisted of creating and awarding an evaluation score to the reports of the companies. An econometric model was tested using a feasible generalized least squares (FGLS) regression to identify the link of the obtained Score with a series of variables representing the characteristics of the companies: Information on a website (I), Foreign ownership (F), Private ownership (P), Listed company (L), Return on assets (ROA), and Return on equity (ROE). Research results highlight a positive correlation between Score and all variables statistically significant in the model. Our study empirically validated the link between non-financial reporting and financial performance. The practical implications for managers can be to focus on improving the quality of non-financial reporting by better presenting the sustainability actions in a circular economy context.

Tracking Waste Management Information Disclosure Behavior Connected to Financial Performance through Moderating Variables

“…This is consistent with prior studies [ 31 , 83 , 84 ] that reveal that a higher degree of environmental information disclosure is correlated with improved company performance, yet these results are contrary to the findings of Qiu et al [ 36 ] and Liu and Zhang [ 85 ], who argued that there is no or a negative correlation between environmental information disclosure and financial performance. After conducting the moderation analysis, we can emphasize that compared to similar studies [ 34 , 38 , 39 , 40 , 43 , 61 ] conducted on environmental information disclosure and corporate performance, the results are more nuanced and indicate mixed influences, which leads us to the resolution of more detailed and in-depth research in the future, on a more generous sample and a larger and more complex data set.…”

“…At the same time, the industry is a factor that may affect both ESG disclosures and financial performance [ 33 , 59 , 60 ]. Analyzing from the perspective of Romanian companies with over 500 employees, the implementation of circular economy principles, Hategan et al [ 61 ] confirmed the correlation between the non-financial reporting indicators and financial performance; the positive correlations between the non-financial reporting score, ROE, and ROA indicators have been demonstrated for the manufacturing industry. For these reasons, this study tested whether the environmentally sensitive industry status exhibits a moderating effect on waste information disclosure and financial performance.…”

Multi-Energy Concern as an Example of the Implementation of Agenda 2030: Poland as a Case Study

“…The main difference comes down to the statement that two relatively economically equivalent entities are linked by consolidation, while by incorporation, a larger entity (economically, financially, organizationally) incorporates a smaller entity, although it is not an exclusive rule (there are cases reverse) [44][45][46].…”

“Green” practices in the food retail sector: evidence from the Romanian market

“…Given its position as an emerging economy, Romania was chosen as country of investigation for this study especially because, amid European Union members, it faces many environmental-related challenges, mainly in terms of pollution; according to the 2021 World Air Quality Report (IQAir, 2021), Romania ranks 13 amid the most polluted countries in Europe. The investigation of companies acting on the Romanian market in relation to the circular economy is gaining an increased interest from Romanian scholars (Oncioiu et al, 2018;Pamfilie et al, 2018;Hategan et al, 2021). However, literature in this area is in its early stages of development.…”