Sustainability reporting quality evolution: An analysis of Italian banks

This study examines the evolution and convergence of sustainability reporting quality (SRQ) in the banking sector under a mandatory disclosure regime. Focusing on Italian banks over the period 2017–2023, the analysis investigates whether institutional pressures have improved reporting quality and reduced heterogeneity across institutions. Grounded in institutional theory, the study conceptualizes SRQ as a multidimensional construct, made of completeness, readability, length, and balance. Using a dataset of 257 observations, the study employs longitudinal comparisons and panel data models to assess changes over time and convergence dynamics. The findings provide partial support for an improvement in SRQ, primarily driven by increased environmental disclosure, while social and governance dimensions and textual attributes remain largely stable. Evidence on convergence is mixed, revealing asymmetric patterns: some dimensions converge toward best and other toward worst performers. Overall, the results suggest that regulatory intervention alone is insufficient to ensure homogeneous and substantive sustainability reporting. The study contributes to existing literature on sustainability reporting by offering new evidence on ESG disclosure dynamics in banking and provides implications for regulators and market participants.