The implementation of the EU Directive on non-financial information determines the transition from a voluntary to a mandatory disclosure setting. This paper is a first attempt to investigate if this transition influences the value relevance of non-financial information, which relates to the environmental, social and governance disclosure (ESG) requirements of the Directive. Italy provides an interesting setting as non-financial information was generally voluntary before the Directive, which was implemented with the Italian Legislative Decree 254/2016. To this extent, we examine the non-financial, environmental and social disclosure practices of 231 Italian listed firms in the pre- (2016) and post- (2017) Legislative Decree application. Our results do not show any relevant increase of such disclosures after the Legislative Decree application, as Italian listed firms limit such disclosure to a minimum requirement. Further, this finding is confirmed also for those firms voluntarily providing a non-financial report (sustainability or integrated report) before the Legislative Decree application. Our regression analysis shows that accounting numbers are associated with share prices, while non-financial, environmental and social information are not value-relevant with reference to the pre- and post-Legislative Decree application. This means that the non-financial, environmental and social information beyond the financial accounting information do not explain any incremental value-relevant information to investors in the non-financial mandatory disclosure setting required by the new regulation. Our results enrich previous evidence concerning the value relevance of non-financial and ESG disclosure mainly focused on Anglo-Saxon contexts.

Does the EU Directive on non-financial information influence the value relevance of ESG disclosure? Italian evidence / Laura Bini; Michela Cordazzo; Giuseppe Marzo. - In: BUSINESS STRATEGY AND THE ENVIRONMENT. - ISSN 0964-4733. - STAMPA. - 29:(2020), pp. 3470-3483. [10.1002/bse.2589]

Does the EU Directive on non-financial information influence the value relevance of ESG disclosure? Italian evidence

Laura Bini;
2020

Abstract

The implementation of the EU Directive on non-financial information determines the transition from a voluntary to a mandatory disclosure setting. This paper is a first attempt to investigate if this transition influences the value relevance of non-financial information, which relates to the environmental, social and governance disclosure (ESG) requirements of the Directive. Italy provides an interesting setting as non-financial information was generally voluntary before the Directive, which was implemented with the Italian Legislative Decree 254/2016. To this extent, we examine the non-financial, environmental and social disclosure practices of 231 Italian listed firms in the pre- (2016) and post- (2017) Legislative Decree application. Our results do not show any relevant increase of such disclosures after the Legislative Decree application, as Italian listed firms limit such disclosure to a minimum requirement. Further, this finding is confirmed also for those firms voluntarily providing a non-financial report (sustainability or integrated report) before the Legislative Decree application. Our regression analysis shows that accounting numbers are associated with share prices, while non-financial, environmental and social information are not value-relevant with reference to the pre- and post-Legislative Decree application. This means that the non-financial, environmental and social information beyond the financial accounting information do not explain any incremental value-relevant information to investors in the non-financial mandatory disclosure setting required by the new regulation. Our results enrich previous evidence concerning the value relevance of non-financial and ESG disclosure mainly focused on Anglo-Saxon contexts.
2020
29
3470
3483
Goal 12: Responsible consumption and production
Laura Bini; Michela Cordazzo; Giuseppe Marzo
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Utilizza questo identificatore per citare o creare un link a questa risorsa: https://hdl.handle.net/2158/1201910
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