Rethinking Non-Financial Reporting in Europe: Challenges and Opportunities in Revising Directive 2014/95/EU

Call for papers for: Journal of Applied Accounting Research

Guest Editors:

Andrea Venturelli, University of Salento, Dipartimento di Scienze dell’Economia

Marco Fasan, Ca’Foscari University of Venice, Dipartimento di Management

Simone Pizzi, University of Salento, Dipartimento di Scienze dell’Economia


Recent years have seen the wide adoption of non-financial reports by firms. The disclosure of non-financial information has come in response to pressures from stakeholders regarding firms’ contributions to sustainable development (Mio et al., 2020a). In this sense, non-financial reporting practices have evolved from activities conducted by socially responsible enterprises to activities conducted to comply with the external pressures of stakeholders such as regulators, investors and citizens(Hussainey and Salama, 2010; Lehner and Harrer, 2019). Also, further stimulus was provided by the 2030 Agenda, which requires the Member States to introduce new forms of regulation within their jurisdictions to increase the transparency of financial markets (United Nations, 2015).

Directive 2014/95/EU represents the main initiative developed in Europe to contribute to the 2030 Agenda actively. The Directive was introduced in response to the external pressures from investors regarding the exigence to provide more information about the social and environmental impacts of European Public Interest Entities (PIEs). (Venturelli et al., 2020). However, the first years after the launch of Directive 2014/95/EU have seen skepticism from policymakers and academics.

From an academic perspective, during the last years accounting scholars underlined the exigence to rethink Directive 2014/95/EU. Several studies show limited effects from the transposition of Directive 2014/95/EU on non-financial reporting’s transparency, assurance practices, data comparability and business models (Doni et al., 2019; Nicolo et al., 2020; Di Tullio et al., 2019; Venturelli et al., 2018). Additionally, preliminary studies conducted before the transposition of the rule by the Member States suggested criticisms related to the definition of Directive 2014/95/EU’s boundaries (Luque-Vílchez and Larrinaga, 2016; Monciardini, 2016; La Torre et al., 2018).  

Regarding the policymakers’ response, the European Commission included the revision of Directive 2014/95/EU within its agenda. Specifically, revisions were judged necessary to fill some gaps identified over the years. The main criticisms the European Commission (2020) report in the Directive 2014/95/EU impact assessment are:

1. There is inadequate publicly available information about how non-financial issues, and sustainability issues in particular, impact companies, and about how companies themselves impact society and the environment. In particular:

a) Reported non-financial information is not sufficiently comparable or reliable.
b) Companies do not report all non-financial information that users think is necessary, and many companies report information that users do not think is relevant.
c) Some companies from which investors and other users want non-financial information do not report such information.
d) It is hard for investors and other users to find non-financial information even when it is reported.

2. Companies incur unnecessary and avoidable costs related to reporting non-financial information. Companies face uncertainty and complexity when deciding what non-financial information to report, and how and where to report such information. In the case of some financial sector companies, this complexity may also arise from different disclosure requirements contained in different pieces of EU legislation. Companies are under pressure to respond to additional demands for non-financial information from sustainability rating agencies, data providers and civil society, irrespective of the information that they publish as a result of the NFRD.

However, similar to the first debates about the implementation of Directive 2014/95/EU (Monciardini, 2016), the opinions collected during the public consultations reveal different stakeholder approaches toward non-financial reporting practices  (European Commission, 2020b). In particular, one of the main insights is the exigence to revise Directive 2014/95/EU to fill gaps related to lack of comparability (71% of respondents), reliability (60%) and relevance (57%). Other criticisms are related to the materiality assessment’s transparency (71%), the need to identify new tools to support the development of digital reports (64%) and the necessity to identify a common reporting standard (82%).

The revision of Directive 2014/95/EU will represent a new challenge for accounting scholars. The theoretical contribution of accounting scholars could help to identify the main strengths and weaknesses over first six years following the introduction of Directive 2014/95/EU. As observed by Bebbington (2013), accounting scholars play a central role in society due to their evidence-based perspective.

The transition from a voluntary to a mandatory approach toward non-financial reporting is a challenge for academics due to the novelty of the field. Although recent years have seen the proliferation of non-financial reporting regulations, the adoption of socially responsible activities has been traditionally analyzed from a perspective based on the voluntary integration of these practices in firms’ strategies (Dumay et al., 2015). Thus, as observed by Mio et al. (2020b) the analysis of mandatory accounting practices requires a step forward from some of the main theoretical approaches used to analyze a voluntary approach to these practices. 

The main aim of the special issue of the Journal of Applied Accounting Research is the development of new scientific knowledge about mandatory non-financial reporting in Europe. Following the traditional approach used in critical accounting research (Gray and Milne, 2015; Scapens, 2008), the special issue is open to a wide range of theoretical, methodological and empirical approaches. In particular, possible sub-topics could be:

  • Limits - What are the limits of non-financial reporting resulting from the transposition of Directive 2014/95/EU? Did the provision of compliance requirements for non-financial statements enhance the quality of non-financial information?
  • Effects - What are the effects of the regulation on the "quality" and "quantity" of information annually disclosed by European PIEs? What are the relationships between non-financial regulation and information asymmetry of investors and/or stakeholders? What are the contributions of the regulation on firms’ decision-making processes, from a real accounting perspective?
  • Harmonization - What has been the contribution to the harmonization of non-financial information? Did the different implementation mechanisms by Member States affect non-financial reporting?
  • Materiality - How did the materiality principle affect the definition of the content of non-financial reports?
  • Disclosure and investors - What was the relationship between non-financial reporting and financial performance (e.g. cost of equity, cost of debt, etc.)? What was the investors’ reaction to the increased transparency of corporate information?
  • Technological innovation and digitization - What was the relationship between mandatory non-financial reporting and technological innovation (e.g. AI, blockchain)? In which way new taxonomies and iXBRL impact on the comparability of non-financial information?


Deadline and Submission Details

The submission deadline for all papers is 30 April 2021.

The publication date of this special issue is February 2022.

To submit your research, please visit the ScholarOne manuscript portal.

To view the author guidelines for this journal, please visit the journal's page.

Contact the Guest Editors:

Andrea Venturelli
University of Salento 
[email protected]

Marco Fasan 
Ca’Foscari University of Venice 
[email protected]

Simone Pizzi 
University of Salento 
[email protected]



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