Sustainability reporting in view of the European sustainable finance taxonomy: Is the financial sector ready to disclose circular economy?

Abadía, José Mariano Moneva; Scarpellini, Sabina; Aranda‐Usón, Alfonso; Etxeberria, Igor Álvarez

doi:10.1002/csr.2423

Cited by 22 publications

(13 citation statements)

References 60 publications

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“…In summary, firm‐level (Cui et al, 2020; Peng et al, 2023) and country‐level governance characteristics explain the presence, scope and quality of ER (Liu & Anbumozhi, 2009; Solikhah & Maulina, 2021). According to regulatory policies in the EU and US, investors and governance structures are expected to play essential roles in directing financing towards sustainable businesses (Moneva et al, 2022). Adding to the existing literature we offer a deterministic view on CG which is perceived as a structure that allows for a coordinated and planned process of introducing particular practice and leading to effective cooperation of a firm with its stakeholders and shareholders.…”

Section: Introductionmentioning

confidence: 99%

Corporate governance perspective on environmental reporting: Literature review and future research agenda

Aluchna,

Roszkowska‐Menkes,

Khan

2023

Corp Soc Responsibility Env

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The last three decades have witnessed substantial growth in the literature exploring the motives and drivers of corporate greening. Extant research analyzing the governance determinants of corporate environmental disclosure provides competing and contrasting results; despite the growing sustainability challenges create an urgent need for effective monitoring and incentive mechanisms to promote corporate transparency and accountability. This warrants further inquiry in the field, yet very few comprehensive reviews have been presented on governance determinants of corporate environmental disclosure. To fill this gap we conduct a systematic review of 121 published papers and distinguish the governance mechanisms fostering corporate environmental disclosure. Our paper identifies factors influencing the adoption, extant, and quality of environmental disclosure, and provides useful future research directions.

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Section: Introductionmentioning

confidence: 99%

Corporate governance perspective on environmental reporting: Literature review and future research agenda

Aluchna,

Roszkowska‐Menkes,

Khan

2023

Corp Soc Responsibility Env

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“…The authors of [25] noted that CE disclosure within sustainability reports is often superficial and inconsistent in the European Union. The authors of [29] stated that in Europe, CE disclosure is in an early phase in the financial sector since only a minority of CE issues are disclosed without being subject to external assurance. Other studies found an absence or vagueness in the CE information provided [16,[30][31][32][33].…”

Section: Literature Review and Research Hypothesismentioning

confidence: 99%

How Circular Economy Disclosure Responds to Institutional Determinants Empirical Evidences in Non-Financial European Firms

Pozzoli,

Nastari,

Pisano

et al. 2023

Sustainability

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Despite the increasing attention that the circular economy (CE) has received at the international level in recent years, the literature has paid limited attention to the importance of institutional factors that may influence firms’ disclosure of CE. Thus, there is a gap in the study of CE disclosure, especially when compared with other studies dedicated to environmental disclosure. This paper aims to fill this gap by investigating the institutional pressures, in terms of coercive, normative, and mimetic factors, that influence firms’ behavior with respect to CE disclosure. This research focuses on a sample of 366 nonfinancial firms, operating in 14 EU countries between 2015 and 2020. The results show that coercive and mimetic institutional pressures positively influence the level of CE disclosure issued by the firms. More specifically, the stringency of the environmental policy (coercive pressure) and the belonging to an environmentally sensitive sector (mimetic pressure) have a positive impact on the CE disclosure provided. With respect to normative pressure, the results are mixed. In fact, only the adoption of Global Reporting Initiatives’ (GRIs) standard requirements is positively and significantly related to CE disclosure. The presence of an external assurance, as well as the commitment to the SDGs, is not significantly related to the CE disclosure. The absence of an analytical standard that organically addresses the issue of CE, by guiding companies in their disclosure, may explain the irrelevance of these factors in the process of convergence of the information produced. This research contributes to this area by filling a gap in the CE literature, providing some insights into the determinants of disclosure and the role of institutional pressures in influencing the level of CE information. In addition, the research adds to previous studies on disclosure by measuring the CE information provided by companies with an indicator developed based on specific environmental items collected from the Refinitiv Eikon database, which could be used in future research. The findings of this paper have some important practical implications. In particular, the results confirm to policymakers that stricter regulations have a positive impact on disclosures related to the CE. Thus, a new specific European regulation should promote more homogeneous and analytical CE disclosure, increasing the sensitivity among firms and practitioners on this topic. A similar approach may be followed for the same purpose by other regional or local policymakers. The paper also emphasizes the necessity of introducing more stringent regulations on assurance and SDGs by the regulatory or professional bodies to achieve greater uniformity of behavior by firms.

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“…Similarly, Marco-Fondevila et al (2021) highlighted an absence of CE information in sustainability reports. Additionally, Moneva et al (2022) revealed that CE disclosure is still in an ancestry stage in the financial sector, since it represents only a portion of the disclosed issues and is not subject to external assurance. Analogue results have been provided by Janik et al (2020), who observed that companies operating in the energy sector convey only limited CE-related information through sustainability reports, which mainly focus on the environmental impacts and the greenhouse gas emissions generated by corporate activities.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Many articles have examined the extent of CE disclosure conveyed by companies in their sustainability reports (i.e. Alfatlah et al, 2022;Moneva et al, 2022;Opferkuch et al, 2021Opferkuch et al, , 2022Tiscini et al, 2022;Vitolla et al, 2023). Some scholars have noted that despite general CE information being provided through sustainability reports, a strong subjectivity characterises the disclosed content (Opferkuch et al, 2021(Opferkuch et al, , 2022.…”

Section: Literature Reviewmentioning

confidence: 99%

Circular economy disclosure and integrated reporting: The role of corporate governance mechanisms

2023

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In recent years, attention to the circular economy (CE) has grown considerably and it is now recognised as a model capable of overtaking the current linear economy of unsustainable production and consumption. Organisations have started to implement circular practices to transition towards this sustainable business model and to disclose CE performance to their stakeholders. In this context, the integrated report serves as a suitable tool to provide a holistic representation of how CE could impact the companies' ability to create value over time. The relevance of this model has prompted various scholars to examine CE disclosure. However, only some studies have investigated this topic in the integrated reporting (IR) context. To the best of the authors' knowledge, no studies have examined how corporate governance mechanisms can affect the amount of CE information disseminated through the integrated reports. By applying the lens of stakeholder‐agency theory, this study aims to fill this important gap by analysing the effect of the characteristics of the corporate governance mechanisms on the level of CE disclosure within the integrated reports. The analysis, conducted using a sample of 124 European companies, indicates a positive impact of the board size, board gender diversity and the presence of the corporate social responsibility (CSR) committee on the level of CE disclosure within the integrated reports.

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Sustainability reporting in view of the European sustainable finance taxonomy: Is the financial sector ready to disclose circular economy?

Cited by 22 publications

References 60 publications

Corporate governance perspective on environmental reporting: Literature review and future research agenda

Corporate governance perspective on environmental reporting: Literature review and future research agenda

How Circular Economy Disclosure Responds to Institutional Determinants Empirical Evidences in Non-Financial European Firms

Circular economy disclosure and integrated reporting: The role of corporate governance mechanisms

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