Non-financial Disclosure of Large Portuguese Companies and Its Determinant Factors

Kátia Lemos – Research Center on Accounting and Taxation, Polytechnic Institute of Cávado and Ave, Portugal

Sónia Monteiro – Research Center on Accounting and Taxation, Polytechnic Institute of Cávado and Ave, Portugal

Romeu Marques – Polytechnic Institute of Cávado and Ave, Portugal

Keywords: Decret-Law nº 89/2017;
Non-financial information;
Mandatory reporting;
Voluntary disclosure;
Sustainability report

DOI: https://doi.org/10.31410/ERAZ.S.P.2023.93

Abstract: This paper aims to analyze the degree of disclosure of non-financial information (mandatory vs. voluntary) provided by large Portuguese companies and to identify its determinant factors. A content analysis was conducted on a total of 41 corporate reports published in 2020 by listed and unlisted companies with more than 500 employees. A multiple linear regression model was developed, with a non-financial disclosure index as the dependent variable and visible characteristics of the companies and report-related characteristics as independent variables.

The results indicate that there are statistically significant differences in the level of non-financial information disclosure between listed and unlisted companies. Multiple linear regression model results showed that the variables of profitability and the use of the Global Reporting Initiative framework are statistically significant at a significance level of 5%, while the variable of the extent of the report is statistically significant at a significance level of 10%.

View Full-Text

9th International Scientific ERAZ Conference – ERAZ 2023 – Selected Papers: KNOWLEDGE BASED SUSTAINABLE DEVELOPMENT, hybrid – online, virtually and in person, Prague, Czech Republic, June 1, 2023

ERAZ Selected Papers published by: Association of Economists and Managers of the Balkans – Belgrade, Serbia

ERAZ conference partners: Faculty of Logistics, University of Maribor, Maribor (Slovenia); University of National and World Economy – UNWE, Sofia (Bulgaria); Center for Political Research and Documentation (KEPET), Research Laboratory of the Department of Political Science of University of Crete (Greece); Institute of Public Finance – Zagreb (Croatia); Faculty of Tourism and Hospitality Ohrid, University of St. Kliment Ohridski from Bitola (North Macedonia)

ERAZ Conference 2023 Selected Papers: ISBN 978-86-80194-73-8, ISSN 2683-5568, DOI: https://doi.org/10.31410/ERAZ.S.P.2023

Creative Commons Non Commercial CC BY-NC: This article is distributed under the terms of the Creative Commons Attribution-Non-Commercial 4.0 License (https://creativecommons.org/licenses/by-nc/4.0/) which permits non-commercial use, reproduction and distribution of the work without further permission.

Suggested citation

Lemos, K., Monteiro, S., & Marques, R. (2023). Non-financial Disclosure of Large Portuguese Companies and Its Determinant Factors. In V. Bevanda (Ed.), ERAZ Conference – Knowlegde Based Sustainable Development: Vol 9. Selected Papers (pp. 93-102). Association of Economists and Managers of the Balkans. https://doi.org/10.31410/ERAZ.S.P.2023.93

References

Angonese, R., Sanches, J. R., & Bezerra, F. A. (2014). Determinants of voluntary disclosure of information through the Internet. Context, 14(26), 19-31.

Balluchi, F., Lazzini, A., & Torelli, R. (2021). Credibility of environmental issues in non-financial mandatory disclosure: Measurement and determinants. Journal of Cleaner Production, 288, 125744. https://doi.org/10.1016/j.jclepro.2020.125744

Baumann-Pauly, D., Wickert, C., Spence, L. J., & Scherer, A. G. (2013). Organizing Corporate Social Responsibility in Small and Large Firms: Size Matters. Journal of Business Ethics, 115(4), 693-705. https://doi.org/10.1007/s10551-013-1827-7

Buitendag, N., Fortuin, G. S., & De Laan, A. (2017). Firm characteristics and excellence in integrated reporting. South African Journal of Economic and Management Sciences, 20(1). https://doi.org/10.4102/sajems.v20i1.1307

Caputo, F., Leopizzi, R., Pizzi, S., & Milone, V. (2019). The Non-Financial Reporting Harmonization in Europe: Evolutionary Pathways Related to the Transposition of the Directive 95/2014/ EU within the Italian Context. Sustainability, 12(1), 92. https://doi.org/10.3390/su12010092

Cunha, P., Teixeira, S. A., Santana, A. G., & Bezerra, F. A. (2014). Independent auditing and the quality of information in the disclosure of financial statements: a comparative study between companies audited by the big four and non-big four. Journal of Accounting of the Master’s in Accounting at UERJ, 9(3), 70-87.

Duran, I., & Rodrigo, P. (2018). Why Do Firms in Emerging Markets Report? A Stakeholder Theory Approach to Study the Determinants of Non-Financial Disclosure in Latin America. Sustainability, 10(9), 3111. https://doi.org/10.3390/su10093111

Dyduch, J., & Krasodomska, J. (2017). Determinants of Corporate Social Responsibility Disclosure: An Empirical Study of Polish Listed Companies. Sustainability, 9(11), 1934. https://doi.org/10.3390/su9111934

Fuster, M., & Ortiz, E. (2019). Integrated information, external verification and other conditions. Innovate, 29(73), 39-54.

Gamerschlag, R., Möller, K., & Verbeeten, F. (2011). Determinants of voluntary CSR disclosure: empirical evidence from Germany. Review of Managerial Science, 5(2-3), 233-262. https://doi.org/10.1007/s11846-010-0052-3

Garcia-Benau, M. A., Bollas-Araya, H. M., & Sierra-Garcia, L. (2022). Non-financial reporting in Spain. The effects of the adoption of the 2014 EU Directive. Revista de Contabilidad Spanish Accounting Review, 25(1), 3-15.

Hoffmann, E., Dietsche, C., & Hobelsberger, C. (2018). Between mandatory and voluntary: non-financial reporting by German companies. NachhaltigkeitsManagementForum | Sustainability Management Forum, 26(1-4), 47-63. https://doi.org/10.1007/s00550-018-0479-6

Kansal, M., Joshi, M., & Batra, G. S. (2014). Determinants of corporate social responsibility disclosures: Evidence from India. Advances in Accounting, 30(1), 217-229. https://doi.org/10.1016/j.adiac.2014.03.009

Kiliç, M., & Kusey, C. (2017). Factors influencing sustainability reporting: evidence from Turkey. In the Memory of Prof. Dr. Fehmi Yıldız, Recent Issues in Accounting Finance and Auditing, Trakya University, 139-175.

Malek-Yonan, R., Bakhtiar, M., & Rafsanjani, M. (2016). Analytical study on the importance of non-financial information in company reporting. International Journal of Management and Business Studies, 6(3) 251-255.

Michelon, G., Pilonato, S., & Ricceri, F. (2015). CSR reporting practices and the quality of disclosure: An empirical analysis. Critical Perspectives on Accounting, 33, 59-78. https://doi.org/10.1016/j.cpa.2014.10.003

Mion, G., & Loza Adaui, C. R. (2019). Mandatory Nonfinancial Disclosure and Its Consequences on the Sustainability Reporting Quality of Italian and German Companies. Sustainability, 11(17), 4612. https://doi.org/10.3390/su11174612

Osmanagić Bedenik, N., & Barišić, P. (2019). Nonfinancial Reporting: Theoretical and Empirical Evidence. Sustainable Management Practices. https://doi.org/10.5772/intechopen.87159

Pereira, L., Lemos, K., Monteiro, S., & Ribeiro, V. (2020). The Determinants of Non-Financial Reporting In Portuguese Listed Companies, Proceedings of the 35th International Business Information Management Association Conference (IBIMA), 1-2 April 2020 Seville, Spain, ISBN: 978-0-9998551-4-1.

Pizzi, S., Rosati, F., & Venturelli, A. (2021). The determinants of business contribution to the 2030 Agenda: Introducing the SDG Reporting Score. Business Strategy and the Environment, 30(1), 404-421. https://doi.org/10.1002/bse.2628

Ribeiro, V., & Monteiro, S. (2015). Public and private sector environmental reporting: mandatory or voluntary regulation?, Revista de Ciências Empresariais e Jurídicas, nº 26, pp. 163-188.

Schröder, P. (2022). Mandatory non-financial reporting in the banking industry: assessing reporting quality and determinants. Cogent Business & Management, 9(1). https://doi.org/10.1080/23311975.2022.2073628

Sierra-Garcia, L., Garcia-Benau, M., & Bollas-Araya, H. (2018). Empirical Analysis of Non- Financial Reporting by Spanish Companies. Administrative Sciences, 8(3), 29. https://doi.org/10.3390/admsci8030029

Ştefănescu, C. A., Tiron-Tudor, A., & Moise, E. M. (2020). EU NON-FINANCIAL REPORTING RESEARCH – INSIGHTS, GAPS, PATTERNS AND FUTURE AGENDA. Journal of Business Economics and Management, 22(1), 257-276. https://doi.org/10.3846/jbem.2020.13479

Szadziewska, A., Spigarska, E., & Majerowska, d. E. (2018). The disclosure of non-financial information by stock-exchange-listed companies in Poland, in the light of the changes introduced by the Directive 2014/95/EU. Zeszyty Teoretyczne Rachunkowości, 2018(99 (155)), 65-96. https://doi.org/10.5604/01.3001.0012.2933

Tagesson, T., Klugman, M., & Ekström, M. L. (2013). What explains the extent and content of social disclosures in Swedish municipalities’ annual reports. Journal of Management & Governance, 17(2), 217-235. https://doi.org/10.1007/s10997-011-9174-5

Tarquinio, L., Posadas, S. C., & Pedicone, D. (2020). Scoring Nonfinancial Information Reporting in Italian Listed Companies: A Comparison of before and after the Legislative Decree 254/2016. Sustainability, 12(10), 4158. https://doi.org/10.3390/su12104158

Venturelli, A., Caputo, F., Cosma, S., Leopizzi, R., & Pizzi, S. (2017). Directive 2014/95/EU: Are Italian Companies Already Compliant? Sustainability, 9(8), 1385. https://doi.org/10.3390/su9081385

Venturelli, A., Caputo, F., Leopizzi, R., & Pizzi, S. (2019). The state of art of corporate social disclosure before the introduction of non-financial reporting directive: a cross country analysis. Social Responsibility Journal, 15(4), 409-423. https://doi.org/10.1108/srj-12-2017-0275

Wu, D., & Pupovac, S. (2019). Information Overload in CSR Reports in China: An Exploratory Study. Australasian Accounting, Business and Finance Journal, 13(3), 3-28. https://doi.org/10.14453/aabfj.v13i3.2