A Country-Comparative Analysis of the Transposition of the EU Non-Financial Directive: An Institutional Approach

Abstract

CSR practices and reporting vary across countries and companies. Accouting studies using institutional theory show that even where there are coercive pressures to converge, local practices and traditions are other types of pressures that play a role in maintaining divergence. Similarly, legal studies indicate that harmonisation attempts made by the European Union are usually challenged by States attempting to maintain the status quo of the local context, and this may also apply to CSR reporting harmonization.This research investigates whether or not the institutional pressure toward non-financial reporting harmonization represented by the Directive/2014/95/EU led to convergent behaviours between Member States, at least at the transposition stage. Transposition laws in Member States where CSR has historically played a limited role (i. e. Romania and Bulgaria) are compared with those issued by countries where CSR traditions are much more well developed (France, Belgium and the UK). The analysis focuses on how both mandatory and discretionary requirements have been transposed at a national level.The transposition outcome is analysed in the face of economic-, government- and society-related factors of each country and results show that on several occasions, divergence is catalysed by differences in national business systems. This is aligned with the results of previous studies (e. g. Jamali and Neville, 2011), which argue that historical, cultural, economic and political local contexts mould the CSR conceptualisation existing in a given country, and therefore the convergence of different CSR practices is only apparent.

Assessing the Effects of Directive 2014/95/EU on Nonfinancial Information Reporting: Evidence from Italian and Spanish Listed Companies

“…The NFI Directive granted the Member States some discretion when transposing the law into national legislation. It established a minimum set of mandatory disclosure requirements, but in some respects, it also provided a list of options to choose from (Aureli et al 2020;Pizzi et al 2020). The aim was to ensure the law's implementation across the Member States by accounting for the national context and any existing NFI disclosure requirements (CSR Europe and GRI 2017).…”

“…Specifically, the options given refer to the location of NFI, the use of reporting standards or guidelines, the external verification of information by an independent assurance provider, the possibility for companies to omit information seriously prejudicial to their commercial position (Safe Harbour Principle), and the application of non-compliance penalties (EU Commission 2014). Moreover, Member States could use discretion to set requirements that exceeded the Directive provisions while remaining within the EU objectives (Aureli et al 2020). Several Member States adapted and expanded the definitions of "large undertakings" and "PIEs", thus increasing the scope of the Directive (CSR Europe and GRI 2017).…”

The Commons, the Common Good and Extraterritoriality: Seeking Sustainable Global Justice through Corporate Responsibility

“…This is not limited to state lawmaking; it may well include regional legal solutions. Taking European Union law as an example, the non-financial reporting directive 2014/95/EU constructed a regulatory framework for CSR reporting that requires large companies to disclose information on how they operate and manage social and environmental challenges [108]. The requirements may also accelerate progressive corporate decisions at the regional level by mandating due diligence and seeking information about the behaviour of subsidiaries and suppliers.…”

Management Report as a Component of Nonfinancial Reporting in Ukraine: Theory and Practice of Drafting

“…The document requires large enterprises to publish nonfinancial information, including social and environmental issues. In other words, it's an attempt to move towards the harmonization of nonfinancial reporting (Aureli, Salvatori & Magnaghi, 2020). Mandatory disclosure is necessary because the voluntary corporate social responsibility reporting (CSR) creates significant space for the 'symbolic' reports (Stittle, 2002).…”

“…Disclosure of nonfinancial information, risk management and sustainability issues improves the firm valuation processes and has a positive impact on market price and equity cost of capital (Michelon, Pilonato & Ricceri, 2015;Krištofík, Lament & Musa, 2016). However, Aureli, Salvatori and Magnaghi (2020) notes that states are characterized by different levels of understanding and experience of corporate social responsibility due to the fact that different national laws of corporate social responsibility reporting had appeared before the implementation of the Directive and have different levels of compliance with new legislation requirements (Venturelli et al, 2019). In particular, analyzing the nonfinancial information, disclosed in mandatory and voluntary reports of 223 large companies that are considered as the subjects of public interest for 2015, the average level of compliance was determined (Venturelli et al, 2017).…”