International Evolution of Non-financial Disclosure and Sustainability Reporting

Traditionally, the field of non-financial disclosure was characterized by a voluntary approach, based on the lack of specific disclosure obligations imposed on companies. However, reporting sustainability issues has become increasingly important over the years. Companies began to provide socio-environmental information on a voluntary basis (i.e., in the absence of specific laws or provisions) in order (for instance) to enhance their image, reputation, trust, and consensus with stakeholders and to meet their growing demand for non-financial disclosure. The voluntary initiatives clearly assumed that financial information was not sufficient to accurately delineate a firm’s total value and understand its future developments. However, the content of voluntary reports was often very variegated and the information disclosed in them was difficult to compare. The voluntary approach initially embraced by the European Union was followed by several regulatory interventions on non-financial disclosure. The chapter examined such European transition from voluntary to mandatory non-financial disclosure, highlighting also the role of international reporting standards and presenting several international cases that appear significant for the adopted approaches concerning sustainability disclosure and reporting.