Nonfinancial risk disclosure: The “state of the art” of Italian companies

Abstract

This research represents a preliminary analysis of the nonfinancial risk disclosure and the first after the introduction of the European directive. Using a content analysis, the level of nonfinancial risk disclosure after the introduction of the Directive 2014/95/EU on nonfinancial information has been investigated. Moreover, in order to understand the effectiveness of nonfinancial risk management, the outlook orientation (past, present, and future) and the approach to risk (positive, negative, and neutral) have been examined. The results show how the level of nonfinancial risk disclosure in Italian companies is better than before the introduction of the directive and also still based on the past and present perspective, rather than the future one.

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

“…With reference to the topic of NFI, generally, extant literature does not find unanimous agreement on the potential benefits deriving from more or improved regulation [11,18,19]. In fact, some scholars call for further investigation of the effect of the disclosure of nonfinancial risks [4,20]. Moreover, in a context of mandated disclosure, Dobler [21] observed that companies tend to disclose mainly information on their financial risks.…”

“…In the literature, we can observe a further gap concerning the scarcity of empirical evidence about the potential benefits of the disclosure of NFI in the stakeholder perspective. In particular, the relationship between risk disclosures and firm value is underresearched, as the NFI literature mainly focuses on the motivations supporting the companies' decision to disclose [4,20,22].…”

Does Structural Capital Affect SDGs Risk-Related Disclosure Quality? An Empirical Investigation of Italian Large Listed Companies

“…Among studies focused on nonfinancial risks disclosure in general terms, Dumay and Hossain [33] investigated the sustainability risk mandatory disclosure practices of listed companies in Australia and two studies based on the Italian context, one before the EU transposition introduced Decree No. 254/2016 [5] and one after this decree [43].…”

“…However, past research mainly focused on the disclosure of financial risk in countries where the disclosure was mandatory [43], and the usefulness of risk disclosure for stakeholders, as well as the extent of risk disclosure, have been investigated mainly with reference to financial risks [36,44,45] and its usefulness for investors [35,46]. On the contrary, the disclosure of nonfinancial risks has been scarcely investigated [45], and only recently, theoretical and empirical studies have started to investigate sustainability risk disclosure [47].…”

The engagement of stakeholders in nonfinancial reporting: New information‐pressure, stimuli, inertia, under short‐termism in the banking industry

“…Also, very few studies examining the effects of social, environmental, and sustainable disclosure in the EU banking sector have so far been published (Avrampou, Skouloudis, Iliopoulos, & Khan, ; Fijałkowska et al, 2017; Forcadell & Aracil, ; Rogošić, ; Carnevale, Mazzuca, & Venturini, ; Branco & Rodrigues, ). This paper can therefore be of use to regulatory bodies (Cormier, Ledoux, & Magnan, ; Deegan, ; Freedman & Jaggi, ), organizations (Coupland, ; Gray, Kouhy, & Lavers, ; Gray, Javad, Power, & Sinclair, ; Halme & Huse, 1997; Hackston & Milne, 1996; Lindblom, ;), the banking sector, and the stakeholders involved (Kudratova, Huang, Kudratov, & Qudratov, ; Alniacik, Alniacik, & Genc, ; Campra and Esposito, 2018; Venturelli, Cosma, & Leopizzi, ; Leopizzi, Iazzi, Venturelli, & Principale, ; Clarkson, ).…”