IDEAS home Printed from https://ideas.repec.org/a/wly/corsem/v27y2020i4p1900-1913.html
   My bibliography  Save this article

Are mandatory non‐financial disclosures credible? Evidence from Italian listed companies

Author

Listed:
  • Romilda Mazzotta
  • Giovanni Bronzetti
  • Stefania Veltri

Abstract

According to the Directive 2014/95/EU on non‐financial information (NFI), from 2017 onwards, large companies of member states must provide social, environmental, and governance disclosures. This paper, focusing on the evaluation of the credibility of NFI in Italy after the implementation of the EU Directive, aims to investigate whether making non‐financial disclosures (NFDs) obligatory affect their credibility. From a theoretical perspective of material legitimacy theory, we investigated the NFDs of the 31 FTSE MIB Italian listed companies for the 2017 fiscal year. Through a meaning‐oriented content analysis, we developed a self‐constructed credibility index applying an operational framework based on the Habermas idealism. Our framework conceives credibility as a multidimensional construct, constituted of three sub‐dimensions: truth, sincerity and appropriateness, and understandability. Our findings show that the NFDs of Italian FTSE MIB companies tend to be credible, contributing to widen the empirical researches addressed to investigate the credibility of NFDs in mandatory contexts.

Suggested Citation

  • Romilda Mazzotta & Giovanni Bronzetti & Stefania Veltri, 2020. "Are mandatory non‐financial disclosures credible? Evidence from Italian listed companies," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(4), pages 1900-1913, July.
    • Handle: RePEc:wly:corsem:v:27:y:2020:i:4:p:1900-1913
    DOI: 10.1002/csr.1935
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/csr.1935
    Download Restriction: no
    File URL: https://libkey.io/10.1002/csr.1935?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Adriana Rossi & Lara Tarquinio, 2017. "An analysis of sustainability report assurance statements," Managerial Auditing Journal, Emerald Group Publishing Limited, vol. 32(6), pages 578-602, June.
    2. Veltri, Stefania & Ferraro, Olga, 2018. "Does other comprehensive income matter in credit-oriented systems? Analyzing the Italian context," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 30(C), pages 18-31.
    3. Devalle, Alain & Magarini, Riccardo & Onali, Enrico, 2009. "Assessing the Value Relevance of Accounting Data After the Introduction of IFRS in Europe," MPRA Paper 56174, University Library of Munich, Germany, revised 08 Oct 2009.
    4. Mine Aksu & Arman Kosedag, 2006. "Transparency and Disclosure Scores and their Determinants in the Istanbul Stock Exchange," Corporate Governance: An International Review, Wiley Blackwell, vol. 14(4), pages 277-296, July.
    5. Theodore J. Mock & Sunita S. Rao & Rajendra P. Srivastava, 2013. "The Development of Worldwide Sustainability Reporting Assurance," Australian Accounting Review, CPA Australia, vol. 23(4), pages 280-294, December.
    6. Olivier Boiral, 2013. "Sustainability reports as simulacra? A counter-account of A and A+ GRI reports," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 26(7), pages 1036-1071, September.
    7. Michelon, Giovanna & Pilonato, Silvia & Ricceri, Federica, 2015. "CSR reporting practices and the quality of disclosure: An empirical analysis," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 33(C), pages 59-78.
    8. Cho, Charles H. & Laine, Matias & Roberts, Robin W. & Rodrigue, Michelle, 2015. "Organized hypocrisy, organizational façades, and sustainability reporting," Accounting, Organizations and Society, Elsevier, vol. 40(C), pages 78-94.
    9. Dominique Diouf & Olivier Boiral, 2017. "The quality of sustainability reports and impression management," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 30(3), pages 643-667, March.
    10. Somaiya Yunus & Evangeline Elijido-Ten & Subhash Abhayawansa, 2016. "Determinants of carbon management strategy adoption: Evidence from Australia’s top 200 publicly listed firms," Managerial Auditing Journal, Emerald Group Publishing, vol. 31(2), pages 156-179, February.
    11. Christopher W. Nobes & Christian Stadler, 2015. "The qualitative characteristics of financial information, and managers' accounting decisions: evidence from IFRS policy changes," Accounting and Business Research, Taylor & Francis Journals, vol. 45(5), pages 572-601, August.
    12. Giovanna Michelon & Antonio Parbonetti, 2012. "The effect of corporate governance on sustainability disclosure," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 16(3), pages 477-509, August.
    13. Vivien Beattie & Bill McInnes & Stella Fearnley, 2004. "A methodology for analysing and evaluating narratives in annual reports: a comprehensive descriptive profile and metrics for disclosure quality attributes," Accounting Forum, Taylor & Francis Journals, vol. 28(3), pages 205-236, September.
    14. Andreas Georg Scherer & Guido Palazzo, 2011. "The New Political Role of Business in a Globalized World: A Review of a New Perspective on CSR and its Implications for the Firm, Governance, and Democracy," Journal of Management Studies, Wiley Blackwell, vol. 48(4), pages 899-931, June.
    15. Erlend Kvaal & Christopher Nobes, 2010. "International differences in IFRS policy choice: A research note," Accounting and Business Research, Taylor & Francis Journals, vol. 40(2), pages 173-187.
    16. Laura Girella & Paola Rossi & Stefano Zambon, 2019. "Exploring the firm and country determinants of the voluntary adoption of integrated reporting," Business Strategy and the Environment, Wiley Blackwell, vol. 28(7), pages 1323-1340, November.
    17. Sara Moggi, 2019. "Social and environmental reports at universities: a Habermasian view on their evolution," Accounting Forum, Taylor & Francis Journals, vol. 43(3), pages 283-326, July.
    18. Robert M. Bushman & Joseph D. Piotroski & Abbie J. Smith, 2004. "What Determines Corporate Transparency?," Journal of Accounting Research, Wiley Blackwell, vol. 42(2), pages 207-252, May.
    19. Breeda Comyns & Frank Figge, 2015. "Greenhouse gas reporting quality in the oil and gas industry," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 28(3), pages 403-433, March.
    20. Cory Searcy & Ruvena Buslovich, 2014. "Corporate Perspectives on the Development and Use of Sustainability Reports," Journal of Business Ethics, Springer, vol. 121(2), pages 149-169, May.
    21. MaryAnn Reynolds & Kristi Yuthas, 2008. "Moral Discourse and Corporate Social Responsibility Reporting," Journal of Business Ethics, Springer, vol. 78(1), pages 47-64, March.
    22. Renzo Junior & Peter Best & Julie Cotter, 2014. "Sustainability Reporting and Assurance: A Historical Analysis on a World-Wide Phenomenon," Journal of Business Ethics, Springer, vol. 120(1), pages 1-11, March.
    23. Craig Deegan & Barry J. Cooper & Marita Shelly, 2006. "An Investigation of TBL Report Assurance Statements: Australian Evidence," Australian Accounting Review, CPA Australia, vol. 16(39), pages 2-18, July.
    24. Giacomo Manetti & Simone Toccafondi, 2012. "The Role of Stakeholders in Sustainability Reporting Assurance," Journal of Business Ethics, Springer, vol. 107(3), pages 363-377, May.
    25. O'Dwyer, Brendan & Owen, David L., 2005. "Assurance statement practice in environmental, social and sustainability reporting: a critical evaluation," The British Accounting Review, Elsevier, vol. 37(2), pages 205-229.
    26. Petros Vourvachis & Thérèse Woodward, 2015. "Content analysis in social and environmental reporting research: trends and challenges," Journal of Applied Accounting Research, Emerald Group Publishing Limited, vol. 16(2), pages 166-195, September.
    27. Fatma Baalouch & Salma Damak Ayadi & Khaled Hussainey, 2019. "A study of the determinants of environmental disclosure quality: evidence from French listed companies," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 23(4), pages 939-971, December.
    28. Mercedes Luque-Vílchez & Carlos Larrinaga, 2016. "Reporting Models do not Translate Well: Failing to Regulate CSR Reporting in Spain," Social and Environmental Accountability Journal, Taylor & Francis Journals, vol. 36(1), pages 56-75, April.
    29. Pablo Archel & Javier Husillos & Carlos Larrinaga & Crawford Spence, 2009. "Social disclosure, legitimacy theory and the role of the state," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 22(8), pages 1284-1307, October.
    30. Giorgio Mion & Cristian R. Loza Adaui, 2019. "Mandatory Nonfinancial Disclosure and Its Consequences on the Sustainability Reporting Quality of Italian and German Companies," Sustainability, MDPI, vol. 11(17), pages 1-28, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Özge Sahin & Karoline Bax & Claudia Czado & Sandra Paterlini, 2022. "Environmental, Social, Governance scores and the Missing pillar—Why does missing information matter?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(5), pages 1782-1798, September.
    2. Stefano Romito & Clodia Vurro, 2021. "Non‐financial disclosure and information asymmetry: A stakeholder view on US listed firms," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(2), pages 595-605, March.
    3. Francesca Bertoncelli & Paola Fandella & Emiliano Sironi, 2021. "The Relationship between Governance Quality and the Cost of Equity Capital in Italian Listed Firms: An Update," JRFM, MDPI, vol. 14(3), pages 1-16, March.
    4. Mark Fuller, 2022. "Wheat and chaff: the degree to which strategic management principles are integrated within corporate social responsibility reporting among large Canadian firms," International Journal of Corporate Social Responsibility, Springer, vol. 7(1), pages 1-17, December.
    5. Chiara Mio & Marco Fasan & Carlo Marcon & Silvia Panfilo, 2021. "Carrot or stick? An empirical analysis of the different implementation strategies of the EU directive on nonfinancial information across Europe," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(6), pages 1591-1605, November.
    6. Nicole Darnall & Hyunjung Ji & Kazuyuki Iwata & Toshi H. Arimura, 2022. "Do ESG reporting guidelines and verifications enhance firms' information disclosure?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(5), pages 1214-1230, September.
    7. Nejla Ould Daoud Ellili & Cemil Kuzey & Ali Uyar & Abdullah S. Karaman, 2024. "Moderating role of internal factors in corporate social responsibility reporting persistence and corporate market value," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(4), pages 2878-2899, July.
    8. Riccardo Santamaria & Francesco Paolone & Nicola Cucari & Luca Dezi, 2021. "Non‐financial strategy disclosure and environmental, social and governance score: Insight from a configurational approach," Business Strategy and the Environment, Wiley Blackwell, vol. 30(4), pages 1993-2007, May.
    9. Salvatore Loprevite & Domenico Raucci & Daniela Rupo, 2020. "KPIs Reporting and Financial Performance in the Transition to Mandatory Disclosure: The Case of Italy," Sustainability, MDPI, vol. 12(12), pages 1-24, June.
    10. Armando Calabrese & Roberta Costa & Nathan Levialdi & Tamara Menichini & Roberth Andres Villazon Montalvan, 2020. "Does More Mean Better? Exploring the Relationship between Report Completeness and Environmental Sustainability," Sustainability, MDPI, vol. 12(24), pages 1-16, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Olivier Boiral & Iñaki Heras-Saizarbitoria & Marie-Christine Brotherton & Julie Bernard, 2019. "Ethical Issues in the Assurance of Sustainability Reports: Perspectives from Assurance Providers," Journal of Business Ethics, Springer, vol. 159(4), pages 1111-1125, November.
    2. Warren Maroun, 2020. "A Conceptual Model for Understanding Corporate Social Responsibility Assurance Practice," Journal of Business Ethics, Springer, vol. 161(1), pages 187-209, January.
    3. Olivier Boiral & Iñaki Heras-Saizarbitoria & Marie-Christine Brotherton, 2019. "Assessing and Improving the Quality of Sustainability Reports: The Auditors’ Perspective," Journal of Business Ethics, Springer, vol. 155(3), pages 703-721, March.
    4. Carmelo Reverte, 2021. "Do investors value the voluntary assurance of sustainability information? Evidence from the Spanish stock market," Sustainable Development, John Wiley & Sons, Ltd., vol. 29(5), pages 793-809, September.
    5. Natalia Vaz Ogando & Silvia Ruiz Blanco & Belen Fernandez-Feijoo, 2018. "A Provider’s Approach to the Assurance Market of Sustainability Reports in Spain," Administrative Sciences, MDPI, vol. 8(3), pages 1-27, June.
    6. Carlos Larrinaga & Adriana Rossi & Mercedes Luque-Vilchez & Manuel Núñez-Nickel, 2020. "Institutionalization of the Contents of Sustainability Assurance Services: A Comparison Between Italy and United States," Journal of Business Ethics, Springer, vol. 163(1), pages 67-83, April.
    7. Teresa Eugénio & Sónia Gomes & Manuel Castelo Branco & Ana Isabel Morais, 2022. "Non-Financial Reporting and Assurance: A New Opportunity for Auditors? Evidence from Portugal," Sustainability, MDPI, vol. 14(20), pages 1-15, October.
    8. Rasmi Meqbel & Mohammad Alta'any & Salah Kayed & Ahmed Al‐Omush, 2024. "Earnings management and sustainability assurance: The moderating role of CSR committee," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(3), pages 1769-1785, May.
    9. Selena Aureli & Mara Del Baldo & Rosa Lombardi & Fabio Nappo, 2020. "Nonfinancial reporting regulation and challenges in sustainability disclosure and corporate governance practices," Business Strategy and the Environment, Wiley Blackwell, vol. 29(6), pages 2392-2403, September.
    10. Charles H. Cho & Matias Laine & Robin W. Roberts & Michelle Rodrigue, 2018. "The Frontstage and Backstage of Corporate Sustainability Reporting: Evidence from the Arctic National Wildlife Refuge Bill," Journal of Business Ethics, Springer, vol. 152(3), pages 865-886, October.
    11. Elies Seguí-Mas & Fernando Polo-Garrido & Helena María Bollas-Araya, 2018. "Sustainability Assurance in Socially-Sensitive Sectors: A Worldwide Analysis of the Financial Services Industry," Sustainability, MDPI, vol. 10(8), pages 1-21, August.
    12. Bradbury, Michael & Jia, Jing & Li, Zhongtian, 2022. "Corporate social responsibility committees and the use of corporate social responsibility assurance services," Journal of Contemporary Accounting and Economics, Elsevier, vol. 18(2).
    13. S. Prakash Sethi & Terrence F. Martell & Mert Demir, 2016. "Building Corporate Reputation Through Corporate Social Responsibility (CSR) Reports: The Case of Extractive Industries," Corporate Reputation Review, Palgrave Macmillan, vol. 19(3), pages 219-243, October.
    14. Jane Andrew & Max Baker, 2020. "Corporate Social Responsibility Reporting: The Last 40 Years and a Path to Sharing Future Insights," Abacus, Accounting Foundation, University of Sydney, vol. 56(1), pages 35-65, March.
    15. Rashid Zaman & Muhammad Bilal Farooq & Fahad Khalid & Zeeshan Mahmood, 2021. "Examining the extent of and determinants for sustainability assurance quality: The role of audit committees," Business Strategy and the Environment, Wiley Blackwell, vol. 30(7), pages 2887-2906, November.
    16. Giorgio Mion, 2020. "Organizations with Impact? A Study on Italian Benefit Corporations Reporting Practices and Reporting Quality," Sustainability, MDPI, vol. 12(21), pages 1-21, October.
    17. Giorgio Mion & Cristian R. Loza Adaui, 2019. "Mandatory Nonfinancial Disclosure and Its Consequences on the Sustainability Reporting Quality of Italian and German Companies," Sustainability, MDPI, vol. 11(17), pages 1-28, August.
    18. Genevé Richard & Elza Odendaal, 2020. "Integrated reporting assurance practices—a study of South African firms," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 17(4), pages 245-266, December.
    19. Patrick Velte & Martin Stawinoga, 2017. "Empirical research on corporate social responsibility assurance (CSRA): A literature review," Journal of Business Economics, Springer, vol. 87(8), pages 1017-1066, November.
    20. Angus W. H. Yip & William Y. P. Yu, 2023. "The Quality of Environmental KPI Disclosure in ESG Reporting for SMEs in Hong Kong," Sustainability, MDPI, vol. 15(4), pages 1-26, February.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:corsem:v:27:y:2020:i:4:p:1900-1913. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1002/(ISSN)1535-3966 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.