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

Cordazzo, M
Primo
;
Marzo, G
Ultimo
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.
Cordazzo, M; Bini, L; Marzo, G
File in questo prodotto:
File Dimensione Formato  
bsepaper.pdf

accesso aperto

Descrizione: versione preprint
Tipologia: Pre-print
Licenza: PUBBLICO - Pubblico con Copyright
Dimensione 274.59 kB
Formato Adobe PDF
274.59 kB Adobe PDF Visualizza/Apri
2020.bse.2589.pdf

solo gestori archivio

Descrizione: versione editoriale
Tipologia: Full text (versione editoriale)
Licenza: NON PUBBLICO - Accesso privato/ristretto
Dimensione 8.01 MB
Formato Adobe PDF
8.01 MB Adobe PDF   Visualizza/Apri   Richiedi una copia

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11392/2421242
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 34
  • ???jsp.display-item.citation.isi??? 35
social impact