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This paper investigates whether and how Directive 2014/95/EU affects financial performance as well as its moderation effect on the relationship between financial and non-financial performance, involving different stakeholders' perspectives.

We adopted the panel data approach to perform random effects regression analysis on a sample of 435 European listed non-financial companies, considering a timeframe of six years. Furthermore, the moderation effect of the Directive 2014/95/EU on the relationship between financial and non-financial performance has been tested.

NFD regulation negatively affects firms' operating profitability and shareholder value while produces no effects on debtholders' returns. Nevertheless, the Directive 2014/95/EU has general positive moderating effects on the relationship between non-financial and financial performance, mitigating the direct costs induced by pursuing non-financial performance.

Shifting from mimetic to coercive isomorphism caused a strengthening of the complementarity between financial and non-financial performance dimensions, extending the concept of performance itself. The analysis carried out is limited to a short-term timeframe and on non-financial companies subject to the Directive 2014/95/EU.

The paper highlights trade-offs between the costs induced by non-financial activities and the benefits of being compliant with the non-financial disclosure (NFD) regulation, supporting managers in allocating business resources.

This paper is among the first that investigates the impact of mandatory NFD on the relationship between non-financial and financial performance. It is also one of the earliest in finding some pieces of evidence on the direct impact of Directive 2014/95/EU on EU companies' financial performance.

This paper discusses the current state of research into Directive 2014/95/EU and non-financial disclosure (NFD), with the aim of offering a future research agenda.

The authors have conducted a systematic literature review of 78 studies spanning seven years (2014–2020) that address Directive 2014/95/EU.

The literature review revealed four main avenues for future research. First, future studies could focus on addressing issues related to the EU Directive's potential impacts, both in terms of NFD and companies' financial performance. Second, because context plays an important role in defining the regulation's impact, future research should consider these contextual factors in NFD. Third, further research should investigate the interplay between the binding requirements of the Directive and the non-binding guidelines suggested to implement it. Finally, future research would do well to employ additional theoretical approaches in order to interpret the Directive's diverse effects for various countries, organisations and timelines.

This research agenda is intended to help scholars in this field to understand what has yet to be known in order to develop a complete understanding of the EU Directive on non-financial information disclosure.

Focussing on the Directive's implementation across countries and organisations with a longitudinal approach, this paper could indicate whether or not mandatory reporting enhances non-financial information disclosure and consequently, organisational actions. This work could inform both companies' and policymakers' approach to disclosure, whether mandatory or otherwise.

To date, many studies have focussed on specific issues regarding the EU Directive. This paper, however, presents the first systematic literature review considering the current state of research into the EU Directive, thus drawing a future research agenda.

This paper aims to investigate how relational connectivity can enhance accountability through non-financial reporting regulation in Europe. The paper contributes to the mandatory disclosure literature and provides practical implications for the application of the EU Directive 2014/95/EU.

A case study research methodology is used, analyzing how a listed Italian insurance company embraces a dialogic communication approach with stakeholders along 2018.

From a theoretical standpoint, this paper enhances the scholarly understanding of the relevance and role of the concept of relational connectivity as a mean for effectively enhancing accountability, providing some prerequisites for effectively implementing relational connectivity. From a practical perspective, results address the criticism related to the directive 2014/95/EU guidelines in effectively helping the organization toward enhancing accountability. Through a case study, results show how companies can achieve in practice the goal of enhancing corporate accountability.

The paper is original, as it addresses the topic of relational connectivity applied to the EU Directive 2014/95/EU. Results contribute to the development of the understanding of the mandatory disclosure in a dialogic perspective. Additionally, the paper addresses a case study showing how the analyzed company used relational connectivity to engage an effective dialogue with stakeholders.

This study aims to investigate the differences in the extent of non-financial disclosure (NFD) across companies listed on the Warsaw Stock Exchange over the period surrounding the implementation of the Directive 2014/95/EU.

The sample comprising 134 selected companies. Content analysis and a disclosure index were used to measure the level of NFD. Non-financial reporting practices in the two years before (2015) and one year after (2017) the implementation of the Directive were compared.

The results highlight that there is already a high level of compliance with the European Union’s regulation. The extent of the NFD across different thematic aspects in reporting media increased significantly between 2015 and 2017 in particular in human rights and anti-corruption. The Directive had the largest impact on those firms with previously low levels of NFD and led to more homogeneity of NFD across different industries.

The study contributes to the understanding of the impact of the Directive on the NFD practices by European Union companies. The research has important implications for policymakers because it revealed that mandatory regulations form a crucial instrument in improving the harmonization of NFD. The research suggests that, due to the Directive, stakeholders should be provided with more comprehensive information that they need in their decision-making process.

While in the past companies have voluntarily disclosed information beyond the financial bottom line, there is now a trend toward mandatory reporting in many countries. With the adoption of Directive 2014/95/EU, the European Union has taken a decisive step in this direction. However, research on the effects of these obligations is still at an early stage, particularly regarding Directive 2014/95/EU. Therefore, this paper aims to pursue the question of whether the directive has led to an improvement in reporting.

The authors analyzed the reporting of the EURO STOXX 50 companies before and after the directive entered into force. To evaluate the improvement, the authors assigned the individual Global Reporting Initiative indicators to the different information requirements of the directive.

Overall, the authors’ study revealed an improvement in reporting. However, this does not apply to all information categories. A significant improvement can be seen regarding the information on policies and due diligence, principal risk and non-financial key performance indicators. Institutional theory suggests that the observed improvements among these reporting-experienced companies can be understood as the result of coercive pressure triggered by the directive’s requirements.

The authors’ study contributes to the debate on the impact of non-financial reporting obligations by providing empirical insights into the effects of Directive 2014/95/EU. These insights can inform political and managerial decision-making, particularly in view of increasing reporting obligations.

The aim of this paper is to examine the effects of the European Non-financial Reporting Directive (2014/95/EU) on firms' sustainability reporting practices, especially reporting quantity (i.e. availability of information) and quality (i.e. comparability and credibility).

To test the main hypotheses, the authors select 905 treated firms from the EU 28 + 2 countries for a difference-in-differences regression analysis of dependent variables from the Refinitiv ESG database.

The results suggest that the Directive influences sustainability reporting quantity and quality. Treated firms provide around 4 percentage points more sustainability information (i.e. availability) than propensity score matched control firms and are 19 percent more likely to receive external assurance (i.e. credibility). However, we also find that the Directive is not the decisive factor in the adoption of GRI guidelines (i.e. comparability).

The analysis is restricted to large listed firms and does not account for small, mid-sized and private firms. Further, cross-cultural differences which influence sustainability reporting are controlled for but not investigated in detail. The authors derive several suggestions for future research related to the NFR Directive and its revision.

The authors’ findings have practical implications for the future development of sustainability reporting in the EU and for other regulators considering the adoption of sustainability reporting.

This study is the first to provide evidence on the NFR Directive's reporting effects across multiple countries. It adds to the growing literature on the consequences of mandatory sustainability reporting. Additionally, this paper introduces a novel measurement approach sustainability information quantity that could benefit researchers.

Motivated by claims that the International Integrated Reporting Framework (IRF) can be used to comply with Directive 2014/95/EU (the EU Directive) on non-financial and diversity disclosure, the purpose of this study is to examine whether companies can comply with corporate reporting laws using de facto standards or frameworks.

The authors adopted an interpretivist approach to research along with current regulatory studies that aim to investigate business compliance with the law using private sector standards. To support the authors’ arguments, publicly available secondary data sources were used, including newsletters, press releases and websites, reports from key players within the accounting profession, public documents issued by the European Commission and data from corporatergister.com.

To become a de facto standard or framework, a private standard-setter requires the support of corporate regulators to mandate it in a specific national jurisdiction. The de facto standard-setter requires a powerful coalition of actors who can influence the policymakers to allow its adoption and diffusion at a national level to become mandated. Without regulatory support, it is difficult for a private and voluntary reporting standard or framework to be adopted and diffused. Moreover, the authors report that the <IRF> preferences stock market capitalism over sustainability because it privileges organisational sustainability over social and environmental sustainability, emphasises value creation over holding organisations accountable for their impact on society and the environment and privileges the entitlements of providers of financial capital over other stakeholders.

The authors question the suitability of the goals of both the <IRF> and the EU Directive during and after the COVID-19 crisis. The planned changes to both need rethinking as we head into uncharted waters. Moreover, the authors believe that the people cannot afford any more reporting façades.

The authors offer a critical analysis of the link between the <IRF> and the EU Directive and how the <IRF> can be used to comply with the EU Directive. By questioning the relevance of the compliance question, the authors advance a critique about the relevance of these and other legal and de facto frameworks, particularly considering the more pressing needs that must be met to address the economic, social and environmental implications of the COVID-19 crisis.

Motivated by the enactment of non-financial reporting regulations by the European Parliament, this paper aims to investigate the impact of European Union (EU) directive 2014/95/EU on the quantity of environmental, social and governance (ESG) disclosures by the S&P Europe 350 index firms. This study also investigates whether the implementation of the non-financial information (NFI) reporting regulations influences the association between ESG disclosures and firms’ earnings risk.

To measure the impact of mandatory regulations on the quantity of ESG disclosures, this study estimates the average treatment effects using a propensity weighted sample. Then this study uses the difference-in-differences method to estimate the differences in the association between ESG disclosures and earning risk before and after implementation of the EU directive.

The results show a significant positive impact of the EU directive on the quantity of ESG disclosures for the sample European public-interest entities, which indicates that the mandatory NFI reporting requirements could boost the availability of increasingly demanded ESG related information. The enhanced association between the ESG disclosures and firms’ earnings risk during the post-directive period reveals that mandating NFI reporting also increases the quality of ESG disclosures.

Using the legitimacy and decision-usefulness theories, this study provides novel evidence concerning the impact of the EU directive on the quantity and quality of ESG disclosures.

This paper aims to investigate the non-financial reporting (NFR) practices of Hungarian listed public interest entities for 2016–2018 in terms of the required disclosure content based on the 2014/95/EU Directive (ED).

The authors apply content analysis methodology on Hungarian firms subject to mandatory reporting under the ED. The target variable in the multivariate model is the reporting quality (Q_i) measured by a combined index.

The authors find that the ED had a moderate impact on Hungary's reporting quality because the overall disclosure of the sample only increased from low to medium level. The authors found that the value of intangible assets is a determinant of the reporting quality before and after the implementation of the ED. The findings support the effect of coercive isomorphism on Hungarian NFR practices.

The limitation of the research is the number of firms examined. However, the authors covered the entire (non-bank) community of the Hungarian firms subject to the ED.

The authors suggest that reporting entities build upon the synergy between intellectual capital disclosure and NFR when elaborating their reporting strategies. The authors recommend the integration of ethical matters into corporate strategies and policies. Policymakers may consider the revision of the Hungarian regulations. The authors suggest academics embrace these topics in teaching.

To the best of the authors’ knowledge, this is the first study that investigates the impact of ED in the context of Hungary. The authors contribute to the existing literature by adding the results of the ridge regression model, highlighting the importance of intangible assets.