The climate-related information in the changing EU directive on non-financial reporting and disclosure: first evidence by Italian large companies

Abstract

PurposeThis paper investigates the quality and quantity of climate-related information disclosed by public interest entities (PIEs) in the non-financial disclosure scenario. Thus, this paper aims at drafting the state of the art on what is climate-related information disclosed by PIEs in the changing EU non-financial regulation assuming the Italian scenario and the industrial industry as significant in achieving the research aims.Design/methodology/approachThe authors used the content analysis composing the sample of 34 large listed companies (i.e. PIEs) belonging to the industrial sector in Italy. The authors choose the Italian PIEs’ sustainability reports published in 2019 after the adoption of the EU directive and its guidelines. The authors adopted a coding and classification system, investigating the climate-related information through a systematic, objective and reliable method. The authors defined 99 indicators along the structure of the European Commission's guidelines and the indicator of disclosure, climate-related information indicator (CII). The framework mainly derives from the corporate disclosure theory and legitimacy and stakeholders' theories.FindingsThe results show the lack of several required climate-related information or a not in-depth presentation of information. Thus, findings are interesting in emphasizing that the current climate-related disclosure is at an early stage in complying with the European Commission's guidelines. Additionally, the findings enlarge previous theories on corporate disclosure, proposing new insights in the light of the recent interest in climate-related information.Research limitations/implicationsEvidence contributes to extending the existing literature, drafting the state of the art of what is the quality and the quantity of the climate-related information in the corporate disclosure in the European scenario.Practical implicationsThis paper is directed to propose the state of the climate-related disclosure following the EU directive guidelines, proposing some evidence to support the path toward the integrations of information by several parts (e.g. companies, regulators and so on).Originality/valueThe paper is a useful baseline for academics, practitioners, policy-makers and regulators in understanding actions to adopt in the climate-related disclosure and what could be the impact of forthcoming regulations in the field, also having some metrics (e.g. score value of disclosure, the indicator of climate-related information disclosure – CII).

Scenario analysis and climate change: a literature review via text analytics

“…Closely related to market transparency is the topic of companies' disclosure of climate change in sustainability reports, especially in the EU directive on non-financial reporting (Lombardi et al, 2022). In the study, the quality and quantity of climate-related information disclosed are examined through the lens of the European Commission's guidelines and within the theoretical frameworks of "corporate disclosure theory" and "legitimacy and stakeholders' theories".…”

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

“…Lombardi et al (2022) investigated the quality and quantity of climate-related information disclosed by PIEs in the non-financial disclosure scenario. The research contributes to extending the existing literature, drafting the state of the art of what is the quality and quantity of the climate-related information, which represents an emerging topic in social and environmental accounting.…”

Klimaatgerelateerde informatie in het bestuursverslag

“…Ook wordt opgemerkt dat de informatie te algemeen en niet gestructureerd is, waardoor de lezer moeilijk een totaalbeeld krijgt van de informatie. Dezelfde resultaten zijn te zien in het onderzoek onder Italiaanse ondernemingen (Lombardi 2021). In dit onderzoek hebben we daarom extra aandacht voor de transparantie over doelstellingen, de doorvertaling van beleid naar acties, de 'tone at the top' en de inbedding in de remuneratie, de inbedding van risicomanagement, het hanteren van scenarioanalyses en het rapporteren van klimaatindicatoren en de voortgang ten opzichte van gestelde doelen.…”

“…Dit bemoeilijkt ook de vergelijking tussen ondernemingen. Dit sluit aan bij de bevindingen van EFRAG (2021) en Lombardi (2021). De verwachting is dat de CSRD met de aanvullende ESRS hier meer structuur in zal gaan brengen.…”