Abstract
The study examines compliance levels of non-financial information (NFI thereafter) of 50 Italian listed companies, with a special emphasis on risk disclosure. We determine whether and to what extent companies are compliant with the Directive 2014/95/EU on NFI and risk disclosures. To achieve such objectives, the study develops a NFI disclosure score based on 165 items and analyzes the 2017 non-financial statements in accordance with the law; overall, 8250 text-units are collected. With reference to risks and opportunities, the findings suggest that companies unanimously identify potential risks but rarely disclose the potential dangers of these risks and the boundaries at which these risks may occur, which, in turn, may negatively influence business activities.
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Notes
- 1.
Public-interest entities are companies exceeding the criterion of the average number of 500 employees during the financial year and covering, at the end of the financial year, one of the following boundary: (a) total assets: 20,000,000 Euro, and (b) total revenues: 40,000,000 Euro.
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Appendix A
Appendix A
Ref. Directive 2014/95/EU | Topic disclosure | N. items | % of companies disclosing such information | Related references |
|---|---|---|---|---|
Art. 19a—environmental issues | Materials | 3 | 24 | GRI 301 – G4-EN1, EN2, EN28 |
Energy | 4 | 42 | GRI 302-1 G4-EN3, EN4, EN5, EN6, EN7 | |
Water | 3 | 33 | GRI 303 – G4-EN8, EN9, EN10 | |
Biodiversity | 4 | 12 | GRI 304 – G4-EN11 | |
Emissions | 7 | 52 | GRI 305 – G4-EN15, EN16, EN17, EN18, EN19, EN20, EN21 | |
Effluents and waste | 5 | 26 | GRI 306 – EN22, EN23, EN24, EN25, EN26 | |
Environmental compliance | 1 | 54 | GRI 307 – G4-EN29 | |
Supplier environmental assessment | 2 | 25 | GRI 308 – G4-EN32, EN33 | |
Art. 19a—social issues | Local communities | 2 | 35 | GRI 413 – G4-SO1, SO2 |
Supplier social assessment | 2 | 41 | GRI 414 – G4-HR10, HR11 | |
Public policy | 1 | 32 | GRI 415 – SO6 | |
Customer health and safety | 2 | 42 | GRI 416 – PR1, PR2 | |
Marketing and labeling | 3 | 38 | GRI 417 – G4-PR3, PR4, PR7 | |
Customer privacy | 2 | 56 | GRI 418 – G4-PR8, PR9 | |
Socioeconomic compliance | 1 | 52 | GRI 419-1 – G4-PR9 | |
Art. 19a—employees | Employment | 3 | 58.6 | GRI 401-1 – G4-LA1, LA2, LA3 |
Labor/management relations | 1 | 54 | GRI 402-1 – G4-LA4 | |
Occupational health and safety | 4 | 42 | GRI 403-1 – G4-LA5, LA6, LA7, LA8 | |
Training and education | 3 | 62 | GRI 404-1 – G4-LA9, LA10, LA11 | |
Art. 19a—human rights | Non-discrimination | 1 | 60 | GRI 406-1, G4-HR3 |
Freedom of association and collective bargaining | 1 | 34 | GRI 407-1 – G4-HR4 | |
Child Labor | 1 | 32 | GRI 408-1 – G4-HR5 | |
Forced or Compulsory Labor | 1 | 28 | GRI 409-1 – G4-HR6 | |
Security practices | 1 | 16 | GRI 410-1 – G4-HR7 | |
Rights of indigenous peoples | 1 | 16 | GRI 411-1 – G4-HR8 | |
Human rights assessment | 3 | 30 | GRI 412-1 – G4-HR9, HR2, HR1 | |
Art. 19a—anti-corruption | Anti-corruption | 3 | 62.6 | GRI 205-1 – G4-SO3, SO4, SO5 |
Anti-competitive behavior | 1 | 50 | GRI 206-1 – G4-SO7 | |
Diversity | Diversity and equal opportunity | 2 | 71 | GRI 405-1 – G4-LA12, LA13 |
“Context” Topics Art. 19a—business model, policies, outcomes, risks and opportunities, KPIs | Business model (general description) | 3 | 55.3 | <IR> Framework |
BM—input | 1 | 48 | <IR> Framework | |
BM—business activities | 3 | 64.7 | <IR> Framework | |
BM—outcomes | 4 | 35 | <IR> Framework | |
Management approach (materiality, topic boundaries, targets, responsibilities, actions and practices, mechanisms to evaluate the management process) | 14 | 65.2 | GRI 103-1, GRI 103-2, GRI 103-3 | |
Materiality determination process | 2 | 64 | <IR> Framework | |
Qualitative disclosure of material matters—current period | 5 | 56.5 | Authors’ elaboration | |
Qualitative disclosure of material matters—present period | 5 | 96.4 | Authors’ elaboration | |
Qualitative disclosure of material matters—forward-looking period | 5 | 15 | Authors’ elaboration | |
Risk and opportunities (for each topic: identification, effects on the business relationship, actions to manage) | 15 | 57.8 | Authors’ elaboration | |
KPIs (for each topic): current period | 5 | 74 | Authors’ elaboration | |
KPIs (for each topic): prior period | 5 | 58 | ||
KPIs (for each topic): forward-looking period | 5 | 6 | ||
KPIs (for each topic): benchmark | 5 | 3 | ||
KPIs (for each topic): measurement methods | 5 | 24 | ||
Others | Economic performance | 4 | 38.5 | GRI 201-1 – G4-EC1, EC2, EC3, EC4 |
Market presence | 2 | 24 | GRI 202-1 – G4-EC5, EC6 | |
Indirect economic impacts | 2 | 34 | GRI 203-1 – G4-EC7, EC8 | |
Procurement practices | 1 | 54 | GRI 204-1 – G4-EC9 | |
Ethics and integrity | 2 | 69 | GRI 102-16 – G4-56, G4-57 | |
Stakeholder engagement | 4 | 85.5 | GRI 102-40, 42, 43, 44 – G4-24, G4-25, G4-26, G4-27 | |
Total | 165 |
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Rizzato, F., Busso, D., Fiandrino, S., Cantino, V. (2019). Non-financial Information and Risk Disclosure: Compliance Levels with Mandatory Requirements in the Italian Market. In: De Vincentiis, P., Culasso, F., Cerrato, S. (eds) The Future of Risk Management, Volume II. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-16526-0_4
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