Financial and Sustainability Reporting: An Empirical Investigation of Their Relationship in the Italian Context
“Integrated reporting ” has gained prominence during the last few years. Investors have required more information also about how sustainability issues and initiatives are expected to contribute to the long-term growth strategy of a business. This communic
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Financial and Sustainability Reporting: An Empirical Investigation of Their Relationship in the Italian Context Marisa Agostini and Ericka Costa
Abstract “Integrated reporting” has gained prominence during the last few years. Investors have required more information also about how sustainability issues and initiatives are expected to contribute to the long-term growth strategy of a business. This communication, which should be provided by top management, leads toward the convergence of sustainability and financial reporting into a single “narrative.” Both financial reporting and non-financial reporting together provide all stakeholders with a comprehensive view of the position and performance of a company. This process has also been encouraged by some European regulations. However, despite these, social and environmental information is still disclosed differently in consolidated annual reports and social–environmental reports. The present work focuses on such differences of content. The analysis regards both (mandatory) consolidated annual reports and (voluntary) stand-alone social–environmental reports prepared by Italian-listed corporate groups for two different accounting periods (both before and after the implementation of Directive 2003/51/EC). The final results show relevant and persistent differences in the disclosure of environmental and employee matters between financial and sustainability reporting. Keywords Integrated reporting Employee issues
Content analysis Environmental disclosure
M. Agostini (&) Department of Management, Ca’ Foscari University of Venice, San Giobbe Cannaregio 873, 30121 Venice, Italy e-mail: [email protected] E. Costa Department of Economics and Management, University of Trento, Via Inama 5, 38100 Trento, Italy e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2018 G. Gal et al. (eds.), Sustainability and Social Responsibility: Regulation and Reporting, Accounting, Finance, Sustainability, Governance & Fraud: Theory and Application, DOI 10.1007/978-981-10-4502-8_17
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M. Agostini and E. Costa
Introduction
The present work focuses on financial and sustainability reporting in order to emphasize the differences with respect to the reported social and environmental information. In a previous paper (Costa and Agostini 2016), the authors highlighted the impact of the 51/2003 European Directive in the Italian context by considering the disclosure of environmental and employee matters both before and after the implementation of the so-called modernization directive. Indeed, Article 14 of that regulation requires that “both financial and, where appropriate, non-financial key performance indicators relevant to the particular business, including information relating to environmental and employee matters” be included in the consolidated annual reports in order to enable a balanced and comprehensive analysis of the development and performance of the business. This European prescription was introduced in Italy by Legislative Decree 32/2007, which integrat
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