The evolution of non-financial report quality and visual content: information asymmetry and strategic signalling: a cross-cultural perspective

Laura Di Chiacchio (), Ben Vivian, Juan Cegarra-Navarro () and Alexeis Garcia-Perez
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Laura Di Chiacchio: Coventry University
Ben Vivian: Coventry University
Juan Cegarra-Navarro: Universidad Polytechnica de Cartagena
Alexeis Garcia-Perez: Aston University

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, 2025, vol. 27, issue 11, No 20, 26427-26457

Abstract: Abstract The increasing stakeholders’ scrutiny requires firms to communicate their non-financial performance to signal their commitment to sustainability. Building on the intention-based view and signalling, legitimacy and institutional theories, this study investigates whether corporate efforts to reduce information asymmetry and enhance their legitimacy led to higher quality and more transparent non-financial reporting practices. This study analyses reports from German, UK and Chinese companies over 14 years. It carries out quantitative and qualitative analysis of textual and visual content to evaluate disclosure density and accuracy of non-financial reports. The findings show limited progress in terms of the density and accuracy of the information disclosed by businesses since 2005. Also, they reveal cultural specificities in the reporting and approach to corporate social responsibility, along with a tendency to “create an appearance of legitimacy” by organisations. This study adds to the literature by studying the use of visual elements in non-financial reports. Moreover, it calls for strict policies and guidelines for the reporting of environmental and social issues by organisations. In particular, the inappropriate use of visual contents, the failure to provide quantitative information and managerial orientations show the need for completeness, transparency, and balance of information in reporting guidelines and regulations. The lack of authenticity and quality of the reports jeopardises the very purpose of non-financial reporting eroding trust in the system by all relevant social and economic stakeholders.

Keywords: Corporate social responsibility; Sustainability; Content analysis; Institutional theory; Legitimacy theory; Signalling theory (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10668-024-04779-z

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