Despite its short-term use, non-financial reporting is an important measure, as demonstrated by numerous theoretical studies and empirical research. However, the mandatory nature of non-financial reporting and public pressure have persuaded company management to address non-financial issues alongside financial ones. Companies from countries with a more prolonged culture and tradition have been more successful in this respect than the companies from “younger” transition countries. Overall, non-financial reporting has raised the level of social responsibility in companies. However, things are far from ideal. Many uncertain situations, e.g., environmental, health, energy, etc., bring new challenges. They require not only non-financial, but also sustainable solutions. Therefore, it is unsurprising that the disclosure of non-financial information has also been renamed sustainability reporting (regarding designation in legal acts). In the presented research, we analyze how Slovenian companies comply with the current legislation (NFRD) requirements and whether their non-financial reports are qualitatively and quantitatively adequate. We are interested in what changes the new legislative proposal (CSRD) requires from them. Are the efforts of the legislator going in the right direction? Will companies be better prepared for environmental and social risks, and therefore better manage for sustainability once the CSRD is in place? The results suggest that the qualitative part of the non-financial reporting is the weakest. This gap in the quality of (required) non-financial reporting is also the subject of the presented research, which shows the (non)quality of the present non-financial reporting and therefore justifies the development of further requirements. Thus, CSRD introduces mandatory and uniform reporting standards based on double materiality, unification of the system of sanctions, external audit, etc. Therefore, our expectations that the new directive will contribute to more sustainability-oriented corporate governance are legitimate and justified. Since the CSRD harmonized sustainability reporting in the EU, this applies to Slovenia and all member states.

A broader range of key stakeholder interests reduces the risk of excessive risk-taking due to profit maximization and leads to more comprehensive corporate governance, which foster CSR practice and considers the right of its key stakeholders (such as human rights) in their operations. To ensure that companies in their corporate governance take into account a broader range of rights and interests, including factors related to the environment, society, and governance, and to ensure socially responsible management, the EU has adopted legislations such as NFRD and CSRD. With such legislation, companies in their corporate governance are obligated to consider a wider circle of stakeholders (individuals or groups), their rights and their needs. In this chapter, the NFRD and CSRD legislation will be examined, and through practical examples using the content analysis method, it will be checked to what extent companies include the interests of key stakeholders in their non-financial information reporting and how they report on their risks and opportunities. Request access from your librarian to read this chapter's full text.

Due to the fact that moral commitments of individuals as well as of corporations were not enough for successful fostering of the socially responsible behaviour of corporations, we are facing the new international and national laws fostering the reporting on non-financial activities of the corporations. We can, therefore, observe how the development of theory on corporate governance, in a relationship with the corporate social responsibility has finally resulted in significant changes in international as well as national legislatives. Therefore, in our paper we examine the legal framework of the EU on corporate social responsibility reporting as well as on non-financial statements of corporations. We analyse the aim, the content and the legal effects of this statements under the last amendments from 2014 (Directive 2014/95/EU) and evaluate its contribution to fortifying the role of corporate social responsibility in the corporate governance of EU corporations. The presented paper argues the importance of institutional development in the context of corporate governance and the influence of institutional measures on corporate ethical behaviour and, consequently, on their success implementing the simple aim to protect the interests of all corporations' stakeholders within the framework of corporate functioning.

(1) Background: As digital technologies become integral to business operations, risks associated with artificial intelligence (AI), data governance, and cybersecurity are emerging as material concerns in the context of corporate sustainability. This article examines the extent to which current sustainability reporting standards (CSRD/ESRS, GRI, ISSB, and SASB) address risks associated with AI and broader digital transitions. (2) Methods: This study employs a qualitative content analysis of twenty corporate sustainability reports across digitally intensive sectors, complemented by a doctrinal legal analysis of the relevant normative instruments governing sustainability and digital risk reporting. (3) Results: This study finds that while references to AI risks are increasingly present, they often lack depth, standardisation, and connection to legal accountability mechanisms. Key gaps include underreporting human rights impacts linked to algorithmic decision-making and limited disclosure on internal AI governance structures. (4) Conclusions: The article argues that to uphold the principles of transparency, due diligence, and stakeholder accountability, sustainability reporting frameworks must evolve to capture the risks associated with AI transitions explicitly. The findings call for regulatory and standard-setting bodies to establish more explicit guidance on AI risk disclosures, and for corporate directors to integrate these dimensions into their risk governance and reporting duties.

Large proportions of small and medium-sized enterprises (SMEs) are family controlled and play an important role not only in the development of many national economies, but also have great potential to reduce negative effects of human activities on the natural environment and society. This important role of family SMEs has been recognized by the European Union (EU) which has integrated them in its legislative frameworks. The main question addressed in our research is whether family SMEs integrate sustainability concerns into their strategic and operative decisions as required by the EU legislative frameworks. We designed our research with the purpose to broaden our understanding of sustainability (re)orientation of family SMEs and fill the gap in the existing literature on family businesses’ sustainability. We applied a qualitative case study research method where sustainability (re)orientation of 26 family SMEs was explored. The qualitative content analysis was used in the process of analysing data. Theoretically and empirically based cognitions on endogenous and exogenous drivers of the family businesses’ sustainability (re)orientation were applied in interpretation of the research results. Our findings show the low level of sustainability (re)orientation of most of the investigated Slovenian family SMEs. The exogenous drivers have stronger effect on sustainability (re)orientation of family SMEs than endogenous drivers.

Efforts to steer directors to the interests of the broader social community rather than simply maximising profits for shareholders are now decades away. International organisations have significantly contributed to enforcing responsible business behaviour with non-binding standards and recommendations. From a legal point of view, the EU/2014 Directive should be highlighted as the first law that introduced the obligation to disclose non-financial information in a company's business report. In the following years, economic and societal changes have shown that such reporting is essential. Still, it probably does not give the stakeholders the information they need for their (investment) decisions. As a result, at the end of 2022, the European legislator replaced the NFRD with a new corporate sustainability reporting directive (CSRD). The latter represents an essential building block of the legislative framework for sustainable financing and promoting sustainable corporate governance. Request access from your librarian to read this chapter's full text.