Abstract:
The level of globalization presented in the 21st century generates in the companies an extremely complex and competitive business environment, requiring efforts to improve the information disclosed, to ensure a higher level of transparency and comparability between different countries.
In this context, the Non-Financial Reporting Directive 2014/95 / EU arises which as implemented, since 2017, the obligation for public interest companies with more than 500 employees to disclose information with a description of the business model, policies, risks, environmental and social performance, as well as measures for workers, respect for human rights, gender equality and the fight against corruption and bribery.
This study assessed the degree of compliance with Decree-Law (DL) No. 89/2017, which transposed that directive to Portugal, by companies listed on Euronext Lisbon, through an analysis of the content of their management reports, report and accounts and sustainability reports. We have created a disclosure index, built on eight mandatory disclosure items / requirements, based on a dichotomous scale to identify whether or not the requirement is disclosed.
Through a linear regression model, we have identified the explanatory factors for the disclosure index of each entity. Considering eight explanatory factors: size, profitability, indebtedness, auditor type, internationalization activity, sector type, report type and the use of GRI framework as a reference in its reports.
The results allow us to conclude that the degree of compliance with DL 89/2017 is quite high, since the average disclosure index is around 0.875. The least disclosed items were the fight against corruption and bribery attempts, bodies diversity policies and human rights. Regarding the location of information, 37.5% of the companies use their own / separate report, and 62.5% choose to include non-financial information in the report and accounts. From the linear regression model we have concluded that only the size pf the company and the type of report are statistically significant factors, explaining 30.40% of the value obtained in the disclosure index.
The results obtained may be a contribution to the accounting regulators regarding potential enforcement mechanisms in case of non-compliance. They may also serve as a learning process for unlisted companies that are interested in implementing non-financial reporting practices.
