Mandatory Disclosure about Environmental and Employee Matters in the Reports of Italian-Listed Corporate Groups

This paper analyses the impact of Italian Legislative Decree 32/2007 – following the 2003/51 European Directive – and the disclosure of environmental and employee matters in terms of overall volume, completeness of information, presence of bad/good news and target-oriented information. Content analysis has been applied to all Italian corporate groups that made public both the consolidated annual report and the stand-alone social and environmental report in 2005 and in 2010, for a total of 96 reports. The results show that despite the overall increase in sentences devoted to environmental and employee matters, the completeness of the information has not substantially improved, indicating that the 2007 regulation has been ineffective. The Italian experience could provide useful insights for European regulators. Such insights may inform policy recommendations to design a mandated social and environmental accountability process with the potential of providing information to societal stakeholders while facilitating accountability.