KPIs Reporting and Financial Performance in the Transition to Mandatory Disclosure: The Case of Italy

Salvatore Loprevite, Domenico Raucci and Daniela Rupo
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Salvatore Loprevite: Department of Sciences of the Society and the Mediterranean Area Formation, University “Dante Alighieri” of Reggio Calabria, 89125 Reggio Calabria, RC, Italy
Domenico Raucci: Department of Economic Studies, University “G. d’Annunzio” of Chieti-Pescara, 65127 Pescara, PE, Italy
Daniela Rupo: Department of Economics, University of Messina, 98122 Messina, ME, Italy

Sustainability, 2020, vol. 12, issue 12, 1-24

Abstract: European companies of public interest requested to comply with the Directive 2014/95/EU on Non-Financial Information (NFI) are allowed to fulfil the regulatory obligation following the Global Reporting Initiative (GRI) guidelines, which constitute at present the most widely spread framework for sustainability reporting. Given such prevalence, this paper examines the level of disclosure on Key Performance Indicators (KPIs) and its relationship with financial performance over the period 2016–2018 for Italian-listed companies adopting GRI guidelines to convey NFI under the Decree 254/2016. The research applies content analysis of the annual and sustainability reports to measure the disclosure index on KPIs, and Data Envelopment Analysis (DEA) to estimate the financial performance. A Tobit-regression model explores the nexus between financial performance and companies’ disclosure. Findings show a decrease in the disclosure levels in the early adoption of mandatory NFI and a significant association with the financial performance of the sampled companies. The study, assuming a comprehensive view of the financial indicators, improves our knowledge of the relationship between sustainability disclosure and financial performance and adds to the literature on the evolution of NFI in the transition from voluntary to mandatory regime.

Keywords: sustainability performance indicators; financial performance; GRI Guidelines; Italy; data envelopment analysis (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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