Guest editorial Rethinking non-financial reporting in Europe: challenges and opportunities in revising Directive 2014/95/EU

Venturelli, Andrea; Fasan, Marco; Pizzi, Simone

doi:10.1108/jaar-02-2022-265

Cited by 11 publications

(19 citation statements)

References 27 publications

(27 reference statements)

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“…Large companies subject to the obligation meet the following dimensional requirements: (i) an average number of 500 employees during the financial year and (ii) a net turnover of over €40 million or total assets exceeding €20 million. It is important to note that the first years after Directive 2014/95/EU implementation have seen skepticism from policymakers and academics (Venturelli et al, 2022). The required disclosure is strictly consistent with the European provision and provides information that illustrates the companies' approach concerning “environmental, social and employee matters, respect for human rights, anti‐corruption and bribery matters.” The related information includes disclosure on the utilized business model, implemented due diligence process, applied policies and their outcome, related risks, and nonfinancial key performance indicators.…”

Section: Institutional Backgroundmentioning

confidence: 99%

Longer board tenure and audit committee tenure. How do they impact environmental performance? A European study

Paolone

Pozzoli

Cucari

et al. 2022

Corp Soc Responsibility Env

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We analyze the impact of board of directors (BoD) tenure and audit committee (AC) tenure on environmental performance (EP) to test whether BoD and AC members' rotation generates higher environmental performance. Data were collected from the Refinitiv Eikon database, structuring a sample of European Union (EU) listed companies belonging to the “old” country members in the period from 2018 to 2020. We found that longer board tenure and longer audit committee tenure each enhance environmental performance, demonstrating that firms could view the tenure rate as a proxy of the quality of the board monitoring. On the contrary, the interaction term (BoD and AC tenure) is negatively related to environmental performance, showing that when two boards have a low rotation, companies may achieve lower environmental performance. These findings help understand the dynamic and complex nature of tenure in corporate governance mechanisms.

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Section: Institutional Backgroundmentioning

confidence: 99%

Longer board tenure and audit committee tenure. How do they impact environmental performance? A European study

Paolone

Pozzoli

Cucari

et al. 2022

Corp Soc Responsibility Env

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“…Therefore, this work seeks to analyze the effectiveness of NFRD in improving SE practices (Korca and Costa, 2020), similar to other studies on related topics (Zarzycka and Krasodomska, 2022). Hence, this research focuses on the importance of performing effective SE in approaching NFR practices-a challenging topic in the academic debate concerning the revision of NFRD (Venturelli et al, 2022). The analysis of these research topics appears to be particularly relevant at this specific moment when the transition from the regulatory framework of the NFRD to that of the CSRD raises important questions about the role of these tools in favoring more effective sustainability reporting.…”

Section: The Stakeholder Engagement Disclosurementioning

confidence: 94%

“…Furthermore, to consider the observations that emerged both from the academic world and from the realities involved in the NFR processes, the EU developed a debate that led to the recent approval of the CSRD. Therefore, the academic community is questioning what the evolution of sustainability reporting could be in the European context, also in light of this significant evolution of the regulatory framework (Pizzi et al, 2022;Venturelli et al, 2022).…”

Section: Role Of a Regulatory Framework In Pursuing More Effective Se...mentioning

confidence: 99%

“…The first studies on the application of the NFRD seem to suggest that this directive has pushed improvements in sustainability reporting quality and quantity (Ottenstein et al, 2022). However, these issues require the development of further study (Venturelli et al, 2022), which will also have to be conducted in light of the new regulatory role promoted by the application of the CSRD. In particular, several authors have argued that progress is needed with respect to the NFRD on the need to introduce a greater focus on sustainability and more integration between non-financial and financial aspects and of new perspectives about the introduction of a new materiality concept (Fiandrino et al, 2022;Raith, 2023).…”

Section: Introductionmentioning

confidence: 99%

“…, 2022). However, these issues require the development of further study (Venturelli et al. , 2022), which will also have to be conducted in light of the new regulatory role promoted by the application of the CSRD.…”

Section: Introductionmentioning

confidence: 99%

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The quality assessment of stakeholder engagement disclosure in the EU mandatory non-financial reporting framework

Petruzzelli

Badia

2023

JAAR

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PurposeThis article investigates the quality of stakeholder engagement (SE) process disclosure in the context of non-financial reporting (NFR) introduced by Directive 2014/95/EU (NFRD). SE implies the involvement of the subjects interested in the organization's activity, according to the principle of inclusiveness and the key concepts of the stakeholder theory (ST).Design/methodology/approachThe authors conducted a content analysis on 75 non-financial statements (NFSs) published by companies listed on the Italian Stock Exchange in 2018 and 2021 to evaluate the evolutionary profiles of SE quality through the years.FindingsThe average level of SE is not significantly high. The research showed an overall poor quality of disclosure concerning stakeholders' key expectations and issues to be addressed and answered. Furthermore, a certain variability emerged in the quality of the disclosure between the various reports, and no significant improvements in SE quality were noted from 2018 to 2021.Research limitations/implicationsThe conclusions provide a replicable method for the analysis of SE quality in NFSs and the development of new standpoints in the ongoing debate on the implications of mandatory legislative frameworks for NFR. Content analyses intrinsically present margins of subjectivity. The sample was limited to a subset of NFS from Italy; hence, the results could be country specific.Practical implicationsThis work suggests some possible ways of improvement of SE practices by companies.Originality/valueOriginal assessment model based on eight variables identified from the academic literature and the most common international sustainability reporting standards. These variables were stakeholder identification, stakeholder selection process, degree of involvement, SE approach, dialogue channels, SE results, different points of view and integration of the SE process.

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Does mandating ESG reporting reduce ESG decoupling? Evidence from the European Union's Directive 2014/95

Aboud,

Saleh,

Eliwa

2023

Bus Strat Env

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This paper investigates the impact of Directive 2014/95 (hereafter, ‘the Directive’) issued by the European Union (EU) that mandates the disclosure of ESG information on ESG decoupling behaviour by EU‐listed firms and whether the strength of national enforcement systems of member states plays a moderating role in this relationship. Using a difference‐in‐differences design and employing a propensity score matched sample of 3020 firm‐year observations from the EU and the United States, we find that both the passage of the Directive in 2014 and the implementation of the Directive in 2017 have a mitigating effect on ESG decoupling. We also find that the strength of national enforcement systems has no impact on the relationship between the Directive and ESG decoupling. Furthermore, our additional analysis indicates that the effect of the Directive is less pronounced for firms that have their ESG information independently audited. Additionally, we find that the impact of the Directive is more pronounced for firms operating in non‐controversial industry sectors. While the Directive is under ongoing revision by the EU Parliament and Commission to be replaced by the new Corporate Sustainability Reporting Directive (CSRD), our study provides timely insights into the effectiveness of the Directive and its impact on ESG information.

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Guest editorial Rethinking non-financial reporting in Europe: challenges and opportunities in revising Directive 2014/95/EU

Cited by 11 publications

References 27 publications

Longer board tenure and audit committee tenure. How do they impact environmental performance? A European study

Longer board tenure and audit committee tenure. How do they impact environmental performance? A European study

The quality assessment of stakeholder engagement disclosure in the EU mandatory non-financial reporting framework

Does mandating ESG reporting reduce ESG decoupling? Evidence from the European Union's Directive 2014/95

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