The Institutionalization of the Consistency and Comparability Principle in the European Companies

Abstract

There is a general tendency in reporting nowadays, represented by the institutionalization of the environmental reporting in an increasing number of companies. The novelty of our work resides in the fact that this is the first study which analyses the consistency and comparability of the information included in integrated reports. The objective of this research is to determine to what extent the reporting of the environmental performance indicators, including energy, prescribed by the Global Reporting Initiative's guidelines is in line with the consistency and comparability principle. We analysed the reports published by the European organisations included in the Pilot Programme of the International Integrated Reporting Council. We used the following methodology. First, we compared the environmental reporting of 2016 from one company to another, splitting the sample in accordance with the industries. Second, we analysed the reporting practices of the environmentally-sensitive companies, including energy, in 2010, 2013 and 2016, in order to analyse the consistency of the information published. The results of the research show that the environmentally-sensitive companies, including energy, publish more information. Also, the score of information consistency is above average. The best consistency level is registered in the Basic Materials industry, followed by Oil & Gas and Industrials. Emissions and energy indicators are the most disclosed. This research is useful to understand how companies apply the consistency and comparability principle in practice. The importance of this article is given by the fact that consistency and comparability improve the quality of the sustainability reporting. Without consistency and comparability the information's relevance is very low.Energies 2018, 11, 3456 2 of 24 to two studies [13,14] investigating in 1999 and 2017 the sustainability reports published by 250 companies included in the G250 35% of the companies disclosed information on social, environmental and economic issues (commonly referred to as corporate social responsibility-CSR) in 1999 and 93% in 2017.As there are almost 400 reporting instruments in place [15], a major issue which appears regarding the environmental reporting is the consistency and comparability of the information. The most comprehensive and used guidelines in the area are the ones issued by the Global Reporting Initiative (GRI) [14]. Thus, the objective of our research is to analyse the consistency and comparability of environmental performance indicators (EPIs), especially the ones related with energy and emissions issues, published by the European companies included in the International Integrated Reporting Council's (IIRC) Pilot Program using the GRI guidelines. Consistency assesses that the information is constantly disclosed in time while the comparability evaluates the disclosure of the information from one company to another. By analysing all the EPIs as opposed to only the ones related with energy and emissions, we emphasize better the importanc...

The impact of the European Directive 2014/95/EU on the energy companies’ disclosures

“…In the same time, the fact that some aspects are better presented than others by the companies shows that there are other drivers of the reporting as well and that the requirements of the Directive are not enough. This finding is in line with the one of Avram et al (2018). Even though the selected companies were included in the energy domain, the environmental key-performance indicators are not the most disclosed.…”

“…We selected them because they are environmentally-sensitive. Previous evidence (Dumitru et al, 2017;Avram et al, 2018;Barbu et al, 2014) shows that the environmentally-sensitive companies tend to report more. We adopted the following approach: first, we extracted the words used in the Directive for writing the names of the indicators.…”

Encompassing Non-Financial Reporting in A Coercive Framework for Enhancing Social Responsibility: Romanian Listed Companies’ Case

“…Thus, most researchers conducted an ex-ante analysis of the non-financial reporting and its determinants (Carini et al, 2018;Szadziewska et al, 2018;Dumitru et al, 2017;Galant and Cerne, 2017), while there are few ex-post evidences (Sierra-Garcia et al, 2018;Venturelli et al, 2017;Matuszak and Rozanska, 2017). For example, the quality of CSR disclosure in Polish-listed Companies in the light of EUD requirements (Matuszak and Rozanska, 2017), the compliance to the EU Guidelines 2017/C215/01 with the IIRF and the GRI 4 guidelines on the European companies (Manes-Rossi et al, 2018), the level of non-financial and diversity disclosure and the transposition of the EUD into Italian law (Venturelli et al, 2017) or the level of completeness of NFI and the expected impact of the EUD in oil and gas sector (Carini et al, 2018) and the clarity of reports published by organizations (containing elements related to bioeconomy) in Europe (Avram et al, 2018).…”

Disclosure Style and Its Determinants in Integrated Reports

“…The integrated report is mainly intended for investors and discloses not only financial, but also non-financial aspects, namely the top management's views on how sustainability issues and initiatives contribute to the long-term growth strategy of the business. Research shows that non-financial reporting has a pivotal role in the investment decisions for a greater percentage of the investors than in previous years [19][20][21][22]. Integrated reporting has been promoted recently as a solution to the shortcomings of financial reporting [23].…”