The “Walk” towards the UN Sustainable Development Goals: Does Mandated “Talk” through NonFinancial Disclosure Affect Companies’ Financial Performance?

Ho-Tan-Phat Phan, Francesco De Luca and Lea Iaia
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Ho-Tan-Phat Phan: Department of Accounting and Finance, Collat School of Business, University of Alabama at Birmingham UAB, Birmingham, AL 35294-4460, USA
Francesco De Luca: Department of Management and Business Administration, University “G. d’Annunzio” of Chieti-Pescara, 65127 Pescara; Italy
Lea Iaia: Department of Management and Business Administration, University “G. d’Annunzio” of Chieti-Pescara, 65127 Pescara; Italy

Sustainability, 2020, vol. 12, issue 6, 1-20

Abstract: With its Global Compact, the United Nations (UN) called companies to align strategies and operations with universal principles on human rights, labor, environment, and anti-corruption, while settling and pursuing the seventeen UN Sustainable Development Goals (SDGs). Achieving SDGs in business reporting is part of the lively debate in the literature about the ability of nonfinancial reporting in providing stakeholders with useful and value-relevant information about companies’ behaviors. This paper intends to address this issue in the aftermath of the recent European Union EU policy (Directive 95/2014/EU) of mandating companies to disclose nonfinancial information (NFI) according to some of the SDGs matters. To this end, the Italian context was analyzed, and main findings provide some early evidence of the absence of association between NFI and financial/market performance. At the same time, the positive association between companies’ Beta factor and size and NFI is supported. This implies that stakeholders still do not appreciate NFI reported according to the new rules and probably that more time is needed to assess the possible advantages of an improved regulation about NFI. However, results show that larger companies and/or companies with higher risk profiles (Beta) have already started to improve their NFI.

Keywords: SDGs; nonfinancial reporting; Directive 95/2014/EU; financial performance; mandatory disclosure; Italy (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 (4)

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