The link between tone and performance of environmental disclosure in a mandatory setting: evidence from Italy

Valentina Beretta, Maria Chiara Demartini and Sara Trucco

Chapter 11 in Research Handbook on Accounting and Organizational Change, 2025, pp 270-291 from Edward Elgar Publishing

Abstract: Non-financial disclosure (NFD) is a topic of growing interest worldwide, especially after the adoption of Directive 2014/95/EU, which mandates specific categories of companies in the European Union to disclose information regarding environmental, social and governance issues. Moreover, due to the recently approved Corporate Sustainability Reporting Directive (2022/2464/EU), the scope of application has been expanded, and new mandatory EU sustainability reporting standards are required. Previous studies grounded in legitimacy theory frameworks are mainly focused on voluntary NFD. Hence, more evidence on the quality of NFD in a mandatory context is needed to understand its relevance better. Furthermore, additional research is needed to understand the role of environmental performance and information in the choice of disclosure strategies and the related impact on disclosure quality. Thus, this chapter aims to identify the components of environmental performance that primarily affect the corporate disclosure quality and, in particular, its tone, and more specifically to examine the extent to which a company's environmental information and performance is independently reflected by the tone of NFD in a regulated setting. In order to do so, all the NFDs issued by Italian listed firms related to the fiscal year 2017 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’ environmental performance. This chapter contributes to the current literature on the effect of mandatory corporate disclosure on environmental corporate disclosure and its tone in a national context.

Keywords: Non-financial information; Mandatory disclosure; Environmental performance; Italian firms; Tone analysis (search for similar items in EconPapers)
Date: 2025
ISBN: 9781803928906
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