Purpose: To determine whether to entrust the European Union (EU) to create a new nonfinancial reporting framework or endorse the extant reporting framework developed by the Global Reporting Initiative (GRI), this study aims to explore whether the mandatory implementation of the EU Directive positively impacted the GRI-based environmental disclosure. Design/methodology/approach: The authors compared the pre- and post-EU Directive environmental disclosure of 16 Italian environmentally sensitive companies. The authors used an extended coding scheme and developed a unique scoring system to compare the quantitative and qualitative changes in environmental disclosure. Findings: The analysis showed that the quantity of environmental disclosure increased after the mandatory EU Directive adoption. The most significant change was observed regarding the disclosure topics explicitly required by the Italian legislature. Additionally, disclosure of soft information continued to prevail over that of hard information in the post-Directive period. While the Directive boosted the level of adherence to GRI standards, Italian companies disclosed information that could be easily mimicked (soft) instead of objective measures that could be verified (hard). In light of this evidence, the endorsement of extant GRI standards could be a valuable option for enhancing the comparability and transparency of environmental disclosure. Originality/value: This study used an original extended coding system and proposed related environmental disclosure indexes that allow monitoring changes in environmental disclosure over time. To the authors’ best knowledge, this study is one of the few that justifies the significant impact of regulation (here the EU Directive) on the increase in environmental disclosure and that uses hard and soft information typology to examine the quality of environmental disclosure.

Purpose: The purpose of this paper is to investigate whether the interaction between mandatory and voluntary risk disclosure is a complementary or substitutive consequence of different risk regulatory regimes. The paper is a cross analysis comparing Germany, the US, Italy, France and the UK during the period 2007-2010. Design/methodology/approach: Content analysis is used to examine mandatory and voluntary risk information in corporate annual reports. A framework for the identification and measurement of risk information is developed by considering national and supranational regulations. Findings: A complementary effect between mandatory and voluntary risk disclosure exists in each risk regulation jurisdiction. This effect does not depend on the presence of national risk rules (Germany and the US) as against national risk guidelines (France and the UK). Some cross-country differences emerge in the extent of the complementary effect, which are based on the national risk regulations. Germany shows the highest degree of complementing mandatory with voluntary risk disclosures. Research limitations/implications: The main limitations relate to the sample size, which is based on the choice of a matched approach and to some country-specific influences on regulatory regimes, which are not analysed. The practical implications refer to the revision or addition of mandated rules by accounting standard setters. Originality/value: The paper contributes to the literature in two ways. First, it proposes an incremental analysis of corporate risk disclosure by examining the interaction between mandatory and voluntary risk disclosure with a complementary or substitutive consequence in different risk regulatory settings not previously investigated. Second, the paper makes a method-based contribution by developing an original analytical framework based on the analysis of different regulatory regimes.

The sustainable finance framework implements the regulation to enhance firms’ sustainable reporting and increase market transparency in channeling funds. However, firms are under the pressure of going green and, thus, often demonstrate a propensity to environmental decoupling, which means the gap between what is told about environmental performance and what is truly done within. The main purpose of our exploratory work is to detect the environmental decoupling among sampled firms. The research problem relates to the effects of reporting requirements and aligning symptoms of environmental decoupling by comparing the increase in qualitative disclosures (talk) relative to measurable KPIs (real actions). We have empirically confirmed the potential problems of environmental decoupling within the environmental aspects other than carbon emissions. We have observed the improvement of qualitative disclosures, while the KPIs other than carbon-emission-related (use of resources and energy) confirmed no real actions. This result is aligned with the current policymakers’ focus on carbon emission reporting. Firms declare the implementation of policies and targets, but it does not fully drive real change. Our study contributes to the emerging strand of the literature on environmental decoupling, as well as offers implications for policymakers, to enhance the efficiency (and prevent environmental decoupling) within the new sustainable finance regulatory framework of the European Union.

Purpose: The research objective was twofold: first, to propose a novel framework for composing an organization’s aggregate risk appetite, and second, to demonstrate the application of this framework in a suitable organization.Design/methodology/approach: A conceptual framework for defining an organization’s aggregate risk appetite was developed based on relevant organizational theory and research through the lens of knowledge management. The organizational appetite for risk framework was subsequently implemented at the São Paulo State Technological Research Institute (IPT) using the design science research approach. Finally, the implementation was carefully examined in order to encourage future applications and to further refine the appetite for risk framework.Findings: The composition and application of the proposed appetite for risk framework optimally identified the aggregated risk appetite of the complete test organization. Moreover, organizational differences between bottom-up tolerance and top-down appetite were revealed.Practical implications: Our main practical contribution is a comprehensive procedure to conduct a risk assessment and achieve an organization-wide aggregate risk appetite through the lens of knowledge management.Originality/value: Unlike past theory and research that take a strictly top-down approach to risk appetite, our framework integrates dispersed knowledge on risk-taking at various levels of the organization, thereby contributing to the underexplored role of bottom management in shaping aggregate risk appetite.

We focus on the market expectation hypothesis to explain the increase in share prices and trading volume of target firms before their merger announcements that have conventionally been attributed to either insider trading or market expectation. We use Financial Times (FT) coverage as a proxy of merger expectation and search for relevant articles for 783 UK target firms between 1998 and 2010. We identify a total of 1049 rumour articles and find that the FT market expectation proxy explains a small percentage of the target price run-ups. Results are strong during the sample period, even though the magnitude for both returns and trading volume tends to decrease within recent years. There is also a strong contemporaneous relation between abnormal returns and trading volume. Unexplained increases in target prices and trading volume may be attributed to insider trading.