Mandatory Nonfinancial Disclosures: The State of Art

Academics and practitioners are clamouring for convergence and/or harmonization of non-financial disclosures (NFD) (Badia et al., 2020; Boiral and Henri, 2017; KPMG, 2016). Previous studies show the de facto harmonization on the application of main standards (GRI, IIRC) by companies (Doni et al., 2019; Cerioni et al., 2021; Tschopp and Huefner, 2015). Several studies investigate the flexibility degree of the contents of NFD regulations (Chelli et al. 2018; Du Plessis, 2016; Bini et al., 2017; Jackson et al., 2020) and if the mandatory regime can determine the typologies of sustainable performance disclosed by companies and the comparability of reports (Grewal et al., 2019; Ioannou and Serafeim, 2015; Stubbs and Higgings, 2018). No research has broadened the perspective to several countries in the world adopting a comparative approach. The objective of our research is to bridge this gap by discussing the convergence in NFD regulatory provisions of different countries. A manual text analysis (Loughran and McDonald, 2016; Steenkamp and Northcott, 2007) of legislation has been performed. The analysis is focused on ten countries with reporting rates of sustainability is higher than 90% (KPMG report, 2020). The main results highlight that there are no similarities between the different legislations. Most of the regulations have a flexible approach leaving a wide margin of discretion to companies. Moreover, while it is true that the NFD today finds a regulatory base in most countries of the world, each legislation differs from the others. There are situations of convergence regarding the position of the report. There is wide flexibility on the choice of framework; despite this, there is a de facto comparability in terms of adopted standards. The need for harmonization can therefore also be refuted at a regulatory level, except for specific sectors or groups of countries.