Sustainability Reporting and Performance: Do Italian Companies Manage Their Narratives in Mandatory Settings?

Maria Chiara Demartini, Sara Trucco and Valentina Beretta

Business Strategy and the Environment, 2026, vol. 35, issue 2, 2434-2452

Abstract: Sustainability disclosure is a topic of growing interest worldwide, especially after the adoption of the Directive 2014/95/EU (NFRD), which mandates specific classes of companies in the European Union to disclose a series of information regarding ESG issues. Moreover, due to the Corporate Sustainability Reporting Directive, new mandatory EU sustainability reporting standards are required. To our best knowledge, only few studies analyzed the content and the quality of nonfinancial disclosure (NFD) after the NFRD in the Italian context, which represents a relevant share of the EU gross domestic product. The purpose of this paper is to examine how the tone of NFD is associated with firms' nonfinancial performance in mandatory settings. All reports by Italian listed firms disclosing information of years 2017–2023 are analyzed. Content analysis is used to assess the quantity and the quality of NFD, whereas a regression analysis tests the link between the tone of NFD and firms' nonfinancial performance. This paper contributes to the current literature on NFD by analyzing the state of the art of the mandatory NFD in one European country and by verifying the link between the tone of NFD and the firms' nonfinancial performance, after the adoption of the NFRD.

Date: 2026
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