The Expansion of Non-Financial Reporting: An Exploratory Study

Forthcoming in Accounting and Business Research

HEC Paris Research Paper No. ACC-2018-1262

35 Pages Posted: 26 Apr 2018 Last revised: 3 May 2018

See all articles by Hervé Stolowy

Hervé Stolowy

HEC Paris - Accounting and Management Control Department

Luc Paugam

HEC Paris, Accounting and Management Control Department

Date Written: April 1, 2018

Abstract

The objective of this study is to investigate how non-financial reporting (NFR) is defined and has expanded in recent years. First, we explore the heterogeneity in definitions and current NFR practices. We find a lack of convergence between regulators and standard-setters, as well as leading sustainable firms. Second, we examine the changes in the extent and type of NFR reported by firms over the period 2006-2016. Based on a sample of firms in South Africa, a leading country in NFR, we document a significant increase in the amount of NFR, particularly between 2006 and 2011. This change appears to be driven by new environmental, human capital, performance and strategic disclosures. The relative importance of financial information in corporate reporting decreased substantially over the same period. Third, we compare reporting practices for corporate social responsibility (CSR)/sustainability information between constituents of the S&P 500 index and the EuroStoxx 600 index. We find that overall, the percentage of firms issuing CSR/sustainability reports increased dramatically between 2002 and 2015 for both stock indices. Constituents of the U.S. stock index and growth firms are less likely to report CSR/sustainability information, whereas firms in the European stock index in environmentally sensitive industries, have high capital intensity and good CSR performance, are larger with better financial performance, are more likely to report CSR/sustainability information.

Keywords: Non-Financial Reporting (NFR), Non-Financial Information (NFI), Integrated Reporting, Corporate Social Responsibility (CSR) Reporting, Sustainability Reporting, Environmental Reporting, Social Reporting

Suggested Citation

Stolowy, Hervé and Paugam, Luc, The Expansion of Non-Financial Reporting: An Exploratory Study (April 1, 2018). Forthcoming in Accounting and Business Research, HEC Paris Research Paper No. ACC-2018-1262, Available at SSRN: https://ssrn.com/abstract=3158184

Hervé Stolowy (Contact Author)

HEC Paris - Accounting and Management Control Department ( email )

Jouy-en-Josas Cedex
France
+33 1 39 67 94 42 (Phone)
+33 1 39 67 70 86 (Fax)

HOME PAGE: http://www.hec.fr/stolowy

Luc Paugam

HEC Paris, Accounting and Management Control Department ( email )

1 avenue de la libération
Jouy-en-Josas, 78350
France

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