m. agostini and e. costa mandatory disclosure about...
TRANSCRIPT
M. Agostini and E. Costa
Mandatory disclosure about environmental and employee matters in Italian listed corporate groups’ reports
Working Paper n. 6/2012July 2012
ISSN: 2239-2734
This Working Paper has been endorsed by prof. Ugo Sostero and published!under the auspices of the Department of Management at Università Ca’ Foscari Venezia. Opinions expressed herein are those of the authors and not those of the Department or the University. The Working Paper series is designed to divulge preliminary or incomplete work, circulated to favour discussion and comments. Citation of this paper should consider its provisional nature.
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Mandatory disclosure about environmental and employee matters in Italian listed corporate groups’ reports
Marisa Agostini,
Ca’ Foscari University of Venice,
Department of Management, San Giobbe
Cannaregio 873, 30121 Venice, Italy.
E-mail: [email protected]
Ericka Costa,
University of Trento, Department of
Computer and Management Sciences, Via
Inama 5, 38100 Trento, Italy.
E-mail: [email protected]
(April 2012)
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Abstract
This paper analyzes the impact of a new specific regulation on the disclosure of environmental and
employee matters in both consolidated annual reports and social-environmental reports. It represents
the first comprehensive attempt, as far as we are aware, at evaluating the impact of the Italian
legislative decree n.32 (2.2.2007), following the 51/2003/CE directive, in both the consolidated annual
and social-environmental reports. All the Italian corporate groups which have drawn up stand-alone
social-environmental reports both in 2005 and in 2010 have been selected: for each one of them also
the consolidated annual reports have been analyzed according to the contents of the regulation under
examination. The results show the differences in corporate disclosure between the reports issued in
2005 (i.e. IAS first year of adoption and before the examined regulation) and those issued in 2010 (i.e.
after the implementation of D.Lgs. 32/2007 which imposed the application of the Directive
51/2003/CE): there is a twofold increase, both in the number of groups which have a section dedicated
to environmental and employee matters in the report on operations and in the value relevance assigned
to non-financial indicators.
Keywords: Environmental and Employee Matters, Non-financial indicators, Social-Environmental Reports, consolidated annual reports, Content Analysis.
JEL Classification Numbers: M41, M48, Q56, Q58.
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1) Introduction In the last decade an increasing number of studies on social and environmental reporting (SER) have
been published (Hooks and van Staden, 2011; Magness, 2006; Parker, 2005; Toms, 2002; Gray, 2001;
Mathews, 1997; Gray et al., 1995a and 1996; Guthrie and Parker, 1990).
In Europe, several researches have analyzed SER practices both in single countries, such as the UK
(Adams, 1995; Campbell & Slack, 2011; Toms, 2002), Germany (Adams & Kuasirikun, 2000;
Cormier et al., 2005), France (Capron & Gray, 2000), Spain (Criado-Jimenez et al., 2008, Llena et al.,
2007; Larrinaga et al., 2002), and in trans-European projects aiming at comparing different SER
practices across countries (Bartolomeo et al., 2000).
In Italy this type of reporting has recently become a topic of great interest in the academic debate
(Farneti et al., 2011; Perrini, 2005). However, “while it is possible to note a growing interest in
analyzing critical case studies, there is scarce use of complete surveys to depict a clear picture of the
state of the art” (Mussari & Monfardini, 2010b, p.5).
Concurrently, there is a growing interest from investors in companies’ integration of social and
environmental performance with financial performance (Eccles & Serafeim, 2011). In fact,
environmental, social and governance factors are becoming increasingly significant for comprehensive
firm valuation. These factors are however of a qualitative nature and are therefore expressed through
non-financial indicators which are not usually been mentioned in consolidated annual reports. National
governments have introduced laws and regulation that bind companies to draw up SER as either an
extension or an internal part of the content required in the annual report. The Italian legislative decree
n.32 (2.2.2007), following the 51/2003/CE directive, introduced many new relevant features regarding
the drawing up of Italian business reports, also from the point of view of non-financial indicators
which must be disclosed inside the reports of operations: “both financial and, where appropriate, non-
financial key performance indicators relevant to the particular business, including information relating
to environmental and employee matters” must be included in the annual reports in order to enable a
balanced and comprehensive analysis of the development and performance of the business (Directive
2003/51/EC). This seems to be recognition that something more about corporate performance should
be included in the traditional financial reporting in order to increase the ability of accounting and
financial reporting data to represent and report information useful in assessing firm value and
management performance. This inclusion follows the already recognized decrease in the importance of
tangible assets and the need to take definitively into account intangibles which may represent a
significant portion of corporate value, especially over the longer term. The International Accounting
Standards Board has already recognized the importance of intangibles in a project proposal which was
developed and considered by the IASB starting from its meeting in December 2007. The Intangible
Assets research project has been referred to in the Memorandum of Understanding (MoU) between the
IASB and the FASB and has represented an opportunity for making substantive improvements to the
requirements of accounting for Intangible Assets specified in IAS 38 Intangible Assets. This Standard
requires an entity to recognize an intangible asset if, and only if, specified criteria are met. The
Standard also specifies how to measure the carrying amount of intangible assets and requires specified
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disclosures about intangible assets. So, financial accounting has definitively taken into account this
particular type of asset which was considered as non-financial until some years ago. The same has not
already been decided for the particular set of extra-financials which includes aspects related to
environmental, social and governance (ESG) issues: the concept of ESG issues refers to extra-
financial material information about the challenges and performance of a company on these matters.
Social reports currently issued by listed companies depict information on some of these factors.
However, despite an effective information overflow, this is not organized in such a manner as to be
provided in a systematic and standardized way according to IFRS (International Financial Reporting
Standards). This sort of organization is required to enhance the scope and the quality of environmental
financial reporting (Firoz & Ansari, 2010). The Italian legislative decree n.32 (2.2.2007), following the
51/2003/CE directive, tries to promote the presence of extra-financials (i.e. ESG issues): this paper
aims to verify the impact of this recent law, despite the IFRS lack of specific regulation, in the overall
reports (both financial consolidated and social-environmental) of the companies. In fact, this new
regulation represents the first step towards the mandatory disclosure of issues which have been only
voluntarily disclosed until now.
Numerous studies have investigated the role of mandatory disclosure (Larrinaga et al., 2002; Mobus,
2005; Patten, 2005) and voluntary disclosure (Kolk, 2005; KPMG, 2005) in attempting to assess the
degree of compliance with the standards or requirements established by law (Criado-Jiménez et al.,
2008; Day and Woodward, 2004; Adams, 2004).
Several studies of voluntary SER have demonstrated that it is characterized by a lack of neutrality and
objectivity because it is subject to considerable discretion by managers (Adams, 2004; Deegan and
Rankin, 1996; Gray, 2006) and is often used as a “green-wash” technique devoid of outcome-based
results (Netwon and Harte, 1997). This has induced many scholars to affirm that compulsory SER is
the most appropriate approach (Gray et al., 1996, Bebbington, 1999; Owen et al., 1997). Mobus (2005)
suggests that enforcement mechanisms would make SER mandatory, thus increasing the quality of the
disclosure and reducing manipulative intentions.
However, other research (Criado-Jimenez et al., 2008; Adams et al., 1995, Larrinaga et al., 2002; Day
and Woodward, 2004; Llena et al., 2007) has demonstrated that despite mandatory disclosure, many
companies do not comply with the standard and when they do, the quality of the SER is fairly low.
Following these premises the purpose of this paper is to comprehend the effect of the introduction of
the Italian legislative decree n.32 (2.2.2007) on environmental and employee matters. By analyzing the
overall corporate social disclosure (both in the annual report than in the stand-alone social report) of
listed corporate groups in Italy in 2005 (i.e. before the examined legislation) and in 2010 (i.e. after the
implementation of the legislation) the purpose of this paper is threefold. Primarily, it attempts to
empirically comprehend if and how the regulation had an impact on the number of listed companies
that report on social and environmental issues. Second, our paper aims at understanding which kind of
information about environmental and employee matters was employed before legislation both in
consolidated annual reports and in stand-alone social reports. Finally the research highlights variation
among years of the overall corporate disclosure about the above mentioned issues.
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By developing content analysis (Kripperdorf, 1980), this study examines the volume of disclosure,
emphasizes the difference among years of positive and negative disclosed information, explores the
level of information detail and the strategic planning-role attributed to corporate disclosure.
The results show the above mentioned differences and highlight a twofold increase, both in the number
of groups which have a section dedicated to environment in the report on operations and in the value
relevance assigned to non-financial indicators.
This paper represents the first comprehensive attempt, as far as we are aware, at evaluating the impact
of the Italian legislative decree n.32 (2.2.2007), following the 51/2003/CE directive, in both the
consolidated annual and social-environmental reports.
The paper is organized as follows. The next section reviews the relevant literature on SER regulation
by introducing a brief overview of other studies that have dealt with this issue by focusing on prior
studies on mandatory and voluntary SER. The third section describes the sample of Italian listed
companies and introduced the content analysis performed in their annual report and stand-alone report.
Section four illustrates the empirical evidence and discusses the findings and then some concluding
remarks are presented.
2) Literature Review
2.1 IFRS and other accounting regulation about environmental and employee issues
Given that stakeholders’ environmental concerns underlie the trend towards more corporate disclosure
throughout Europe (Bebbington et al., 2000), firms increasingly view environmental reporting
strategies as a value-added tool (Gamble et al., 1995). In fact, there is evidence that firms in most
European countries are expanding both the quantity and the quality of their environment-based
information disclosure (KPMG, 1999). The format of such environmental reporting has been regulated
through the guidelines published by regulatory authorities such as AccountAbility (1999), the
Federation of European Professional Accountants (FEE, 2002) and the Global Reporting Initiative
(GRI, 2002). This environmental reporting has traditionally been considered as separate from the
consolidated annual report drawn up according to IFRS: this has progressively become a sign of IFRS
inability (especially pertaining to IAS 1, 8, 32 and 39) to reflect corporate responsibility measures in
financial accounts. Moreover, the need for a triple bottom line has progressively emerged (Deegan,
2004; O’Dwyer & Owen, 2005; De Villiers & Van Staden, 2010) as a popular conceptualization and
reporting vehicle for articulating corporate social, environmental and economic performance. By
preparing and disseminating triple-bottom-line statements, an organization conveys an image of
concern for and sensitiveness to the three dimensions of societal responsibility: economic,
environmental and social. This new result has become so crucial that regulatory authorities recognized
the impossibility of continuing to rely on separate reports without knowing how social-environmental
disclosures affect the overall being of a firm. The Italian legislative decree n.32 (2.2.2007), following
the 51/2003/CE directive, makes a first step in order to satisfy this need by requiring disclosure about
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non-financial performance indicators. Even though the results of some studies (Coram et al., 2011)
have demonstrated that considerable attention is paid by investors towards non-financial performance
indicators, a few studies using archival data have examined whether non-financial measures are useful
in company valuations. These studies have found non-financial measures to be of value (Amir & Lev,
1996), particularly as leading indicators of financial performance (Ittner & Larcker, 1998; Banker et
al., 2000). Non-financial performance measures are becoming an important type of disclosure in the
corporate environment as evidenced by calls for more of this type of disclosure by organisations such
as the Enhanced Business Reporting Consortium (EBRC, 2005) and the Institute of Chartered
Accountants in England and Wales (ICAEW, 2003). However, the problems related to the provision of
ESG information are numerous. As ESG issues are inherently of extra-financial nature, they have the
intrinsic shortcomings common to all extra-financial information. Above all, they lack consistent and
standardized definitions and disclosure. Moreover, corporate reports on ESG matters are of limited use
to investment professionals, as relevant information is typically communicated at irregular intervals, in
prose style and scattered between on-line resources and printed reports. Therefore, even when
quantified, information is difficult to compare with data delivered by peers or across periods (Bassen
& Kovács, 2008).
2.2 Voluntary and Mandatory disclosure
Overall corporate social disclosure can be voluntary or mandatory. By definition ‘voluntary […]
disclosures, primarily in annual reports, are a communication mechanism by which firms attempt to
satisfy external pressures to conform to socially acceptable norms, perhaps substituting this
communication mechanism for any substantive behavioral performance’ (Mobus, 2005, p. 495), but
mandatory disclosures occur when firms comply with the requirements established by law.
Scholars in accounting and business ethics agree that voluntary disclosure is characterized by a lack of
completeness, accuracy, neutrality and objectivity because it depends upon the managers’ intentions.
Adams (2004) shows how the corporate reporting of Alpha on its ethical, social and environmental
issues presents an high degree of incompleteness, since the company ‘omits detail of impact on
communities and the environment which are material to key stakeholder groups’ (p. 749).
Furthermore, ‘policies themselves tend to be vague and all-encompassing and should be supported by
a more detailed objective’ (p. 752).
Deegan and Rankin (1996) demonstrated how private sector organizations in Australia do not report
‘bad news’ and indeed ‘organizations appear reluctant to provide any information within their annual
reports about any negative environmental implications of their operations’ (p.59). They concluded that
‘annual reports that omit particular environmental information, or provide it in a biased manner, are
misleading in that they do not provide a full picture of the operations of the business for the period
under review’ (p. 62).
Additionally, Beets and Souther (1999) criticize voluntary disclosure by arguing that it differs from
company to company significantly thereby confounding comparability. The credibility of these reports
is also questioned because they are not always verified by independent third parties.
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By interpreting the worldwide experience, some scholars suggest that the discharge of environmental
accountability will require regulation (Gray et al., 1996; Bebbington, 1999; Deegan and Rankin, 1997;
Owen et al., 1997). The duty to account for social and environmental issues in annual or stand-alone
reports is being increasingly considered by legislators around the world (Australia, Denmark, Spain,
Norway, Sweden; see Adams, 2004; KPMG, 1999).
However, several studies have demonstrated that many companies do not comply with the
requirements of the law or, if they do so, the quality of the reporting is very basic.
For example, Criado-Jimenez et al. (2008) when following on from Larrinaga et al. (2002), show that
by introducing the Spanish ICAC standard in 2002 the volume and quality of disclosure was increased
(especially relating to bad news), even if a considerable level of non-compliance still remains (circa
84%). Similarly Llena et al. (2007) note a considerable increase in environmental disclosure in the
fifty-one Spanish firms investigated between 1992-1994 and 2001-2002, but the degree of compliance
is very heterogeneous and the information reported (especially in 2001 - 2002) is still generic and
positively biased.
Moreover, in the UK Adams et al. (1995) found that 11 out of 100 listed companies did not report on
equal opportunities and the general level of disclosure was very low. Furthermore, Day and Woodward
(2004) demonstrated that only 58% of the 100 large UK London Stock Exchange listed companies
furnished details according to the 1985 Company Act. This study exposes a high degree of non-
compliance with the statutory requirements and raises questions about the symbolic rather than
substantive intent of making organizations accountable.
Concerns over failures and/or lack of standardization have led to a number of initiatives including a
plethora of voluntary guidelines and standards covering various aspects of social and environmental
matters.
Nowadays the most widely used international guidelines are the Global Reporting Initiative (GRI)1
created in 1997 and the AccountAbility 1000 (AA1000) set out in 1996 by the Institute of Social and
Ethical AccountAbility (ISEA)2 (Gao and Zhang, 2006; Belal, 2002; Clarckson et al., 2008). These
guidelines are both grounded on a set of principles that define the way in which SEAR has to be
conducted and managed within companies. Both GRI and AA1000 suggest that the social report is the
final step in a wider circular process aimed at communicating an organization’s value internally to
increase its sustainability performances.
1 The Global Reporting Initiative (GRI) is a multi-stakeholder process and independent institution whose mission is to develop and disseminate globally applicable sustainability reporting guidelines. These guidelines are for voluntary use by organisations for reporting on the economic, environmental and social dimensions of their activities, products and services (GRI, 2002; O’Dwyer & Owen, 2005). 2 ISEA is an international, not-for-profit professional institute dedicated to the promotion of social, ethical and overall organisational accountability. It is a democratic, multi-stakeholder membership organisation (ISEA, 1999; O’Dwyer & Owen, 2005).
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3) Research Design
3.1 Research question
In the light of the above mentioned literature, this paper aims at investigating the effect of the Italian
legislative Decree n. 32 (2.2.2007) on the annual report and the stand-alone social report of 24 listed
corporate groups in Italy.
In other words, this work is an attempt to understand if and how the regulation had an impact on the
environmental and employee matters of Italian listed corporate groups.
3.2 Method
3.2.1 Sample
The sample consists of the consolidated annual reports and social-environmental reports of 24 Italian
listed corporate groups in 2005 and 2010.
Listed corporate groups were selected thanks to several selection criteria: i) the D.Lgs. 32/2007
recommends to provide employee and environmental information in the consolidated annual report; ii)
listed corporate groups have more visibility than Italian SMEs (Deegan & Gordon, 1996; Hackston &
Milne, 1996); iii) previous research in Italy has demonstrated the importance of social and
environmental issues for listed corporate groups (Andreaus, 2007).
In order to identify the Italian listed corporate groups the web site of the CONSOB has been analyzed.
CONSOB is the National Commission for Companies and Stock Markets (Commissione Nazionale per
le Società e la Borsa) and is the public authority responsible for regulating the Italian securities market.
In October 2011 there were 264 listed corporate groups in Italy. By looking at the Internet web sites of
these groups we discovered that 53 (20%) of them also produced a stand-alone social report in 2010.
Previous research has demonstrated that in 2005 the percentage of listed corporate groups which drew
up a stand-alone social report were 35 (14%).
The classification of sectors of activity, promoted by the Italian Stock Exchange markets, confirms
previous studies and emphasizes that most of the corporate groups dealing with social and
environmental reporting operate in the banking sector (22.6%) and the public utilities sector (22.6%).
Following previous research on the corporate social and environmental reporting of Italian listed
corporate groups (Andreaus, 2007; Pesci & Andrei, 2011), this paper employs a list of 24 groups
which has been selected on the basis of the presentation of social and environmental reports in both
2005 and 2010.
It must be specified that 4 corporate banks have not been considered in the sample because they result
from merger and acquisition operations of the last years: more than one 2005 report corresponds to a
single 2010 report because there was more than one entity before M&A operations.
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3.2.2 Content analysis
Content analysis could be defined as “a method of enquiry into the symbolic meaning of messages”
(Kripperdorf, 1980, p. 22) and “a technique for gathering data that consist of codifying qualitative
information in anecdotal and literary form into categories for deriving quantitative scales of varying
levels of complexity” (Abbott and Monsen, 1979, p. 504).
Content analysis enables the researcher to collect large amounts of textual information and
systematically identify its property. From a methodological viewpoint many studies in both financial
accounting and environmental-social disclosures adopt an analytic content approach (Adams & Harte,
1998; Adams and McPhail, 2004; Buhr, 1998; Campbell et al., 2006; Guthrie and Parker, 1990;
Hogner, 1982; Tinker & Neimark, 1987).
For the purpose of this study, a quantitative content analysis has been performed to capture the extent
of the disclosure in an objective manner.
The aim of this paper is to use content analysis to explore the reporting practices of Italian listed
corporate groups before and after the examined legislation.
In order to guarantee reliability (Unerman, 2000; Gray et al., 1995b) a pilot test on a few corporate
social reports was carried out. At least three coders were used and discrepancies between them re-
analyzed and the differences resolved (Milne and Adler, 1999).
Since the Italian legislative decree n. 32 (2.2.2007) generally refers to “environment” and “employee”
areas of the disclosures, we have split them into several categories according to the Global Reporting
Initiative classification and added further information where necessary.
Tables B and C in the Appendix show the grid used in the analysis.
3.2.3 Variables
Four main variables were selected for the content analysis. These variables were employed both for
environmental aspects and for employee issues.
The volume of the disclosure (VOLUME) was measured by adopting the number of sentences that
refers to all the indicators presented in the consolidated financial and social-environmental social
reports. As suggested by Milne and Adler (1999), the number of sentences is meaningful for content
analysis because it reflects ideas and importance of what managers want to communicate.
Moreover, sentences are the most appropriate measure of the volume of the disclosure since the Italian
legislative decree n. 32 (2.2.2007) does not provide or suggest specific items to be disclosed, but
simply binds companies to report on environmental initiatives and aspects related to employees.
As mentioned above, these sentences were then classified into 11 categories related to environment
and 11 related to employees in order to better investigate which are the main reported themes.
The researchers read the 24 consolidated financial reports plus the 24 stand-alone social reports both in
2005 and 2010 (96 documents in total) more than once to count all the sentences belonging to the 22
above mentioned areas. By using the number of sentences as a proxy to evaluate the importance
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attributed by managers to environmental and human resources items, we also split this overall
information into three main variables: completeness, good and bad news, perspective information.
The second variable investigates the completeness of the disclosure (COMPLETENESS) in order to
measure how listed corporate groups discharge accountability. Several studies have tried to build a
measure of disclosure more complete and comprehensive than a simple binary code (present or absent)
by adopting a scoring system (Hooks and van Staden, 2011). However, other studies criticizes these
approaches by arguing that this kind of scoring may increase the subjectivity of the content analysis
(Botosan, 2004). For this reason, this paper is based on a “sentence-count” approach and divides the
VOLUME into completeness quality: mention, description, evaluation. The variable completeness is
not a score-point system but simply measures how many sentences are presented in a vague manner
(mention), in a descriptive and exhaustive way (description) or by presenting numerical evaluation of
the business activities’ impact on the environmental and employee matters (evaluation).
Consistent with other studies (Deegan & Ranking, 1996; Deegan & Gordon, 1996; Guthrie & Parker,
1990) we have also evaluated whether Italian listed corporate groups present information which is
favourable (or not) to their corporate image (GOOD and BAD NEWS). For this reason, we
investigated the number of sentences that contribute to improving corporate image and reputation by
presenting initiatives which had positive effects on the environment and employees. On the contrary,
we have also considered bad news in order to analyze how many corporate groups devoted sentences
to refer to negative activity impacts on environmental or employee matters. Previous studies (Guthrie
& Parker, 1990; Deegan & Gordon, 1996; Criado-Jimenez et al., 2008) have demonstrated that
companies are usually more likely to disclose details on social and environmental issues that present
them in a more positive light. Usually companies do not provide “bad news” about their activities
(Guthrie & Parker, 1990) and if they do so, “bad news” is less than a half of “good news” (Criado-
Jimenez et al., 2008).
Finally, we have also considered whether the reported information refers to the past, the present or the
future as an attempt to understand if listed corporate groups use these issues in a perspective way
(PERSPECTIVE INFORMATION). This classification is not frequently employed in content analysis
framework. However, following Ebrahim (2003) we have tried to analyze if disclosure of
environmental and employee matters regards past information (past), simply reports on the year of
reference (present) or makes a forecast about the future (future). In fact, when referring to NPOs,
Ebrahim suggests they use social accounting and reporting not only to monitor performances, but also
as strategic tools for organizational planning.
For some brief examples of the category used in the analysis please refer to Table 1.
[Insert here Table 1]
So, as explained, each sentence has been analyzed taking into account three variables, i.e.
completeness, good and bad news, perspective information. For this reason the total sum of the extent
of the disclosure for each variable is equal.
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3.2.4 Research Hypothesis and Regression Model
For the purpose of this study we have analyzed the main drivers of environmental and employee
matters disclosure, both in consolidated financial and social-environmental reports. In detail, we have
investigated how much the 2007 regulation and/or the sector of activity may explain differences in
social and environmental accountability in Italian listed groups.
Thus, three main hypotheses have been developed.
H1: the completeness of environmental and employee matters has increased either because of 2007
regulation or activity sector sensitiveness or both
H1A: the completeness of environmental and employee matters in stand-alone social report has
increased either because of 2007 regulation or activity sector sensitiveness or both
H1B: the completeness of environmental and employee matters in consolidated financial report has
increased either because of 2007 regulation or activity sector sensitiveness or both
H2: disclosure about environmental and employee bad news has increased either because of 2007
regulation or activity sector sensitiveness or both
H2A: disclosure about environmental and employee bad news in stand-alone social report has
increased either because of 2007 regulation or activity sector sensitiveness or both
H2B: disclosure about environmental and employee bad news in consolidated financial report has
increased either because of 2007 regulation or activity sector sensitiveness or both
H3: disclosure about perspective environmental and employee matters has increased either because of
2007 regulation or activity sector sensitiveness or both
H3A: disclosure about perspective environmental and employee matters in stand-alone social
reports has increased either because of 2007 regulation or activity sector sensitiveness or both
H3B: disclosure about perspective environmental and employee matters in consolidated financial
report has increased either because of 2007 regulation or activity sector sensitiveness or both
The following regression model has been employed:
, , , , , [A]
where:
, is the independent variable which refers to three different variables (mention,
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description, evaluation, good news, bad news3, past, present and future) both for
environmental and employee matters.
, is a dummy variable indicating the regulation. , 0 before regulation (2005)
and , 1 after regulation (2010)
, is a dummy variable indicating the activity sector of the group which could be
sensitive or not sensitive to the environment. , 0if NOT an
environmentally impactful sector and , 1 if an environmentally impactful
sector
, is a dummy variable indicating the combined effect of regulation and sector of
activity. , 0if either regulation or sector of activity have no impact on the
Y variable and , 1 otherwise.
, is the term error.
If the regulation has no impact on the disclosure of the companies the general model [A] could be
simplified in the model [B] as follows:
H0: , and , = 0
, , , [B]
By applying the Pearson Correlation and the F test to the tested regressions the two models will be
compared.
4) Findings
4.1 Environmental and Employee information of Italian listed corporate groups: some insights
The analysis of both consolidated financial reports and social-environmental reports shows that there is
an increasing number of Italian listed corporate groups that have provided information about
environmental and employee concerns.
In detail, Table 2 shows the most reported items both on environment and employees in 2005 and
2010.
In 2005 the most relevant environmental matters were “emissions” (67% of the analyzed reports),
followed by “energy” (65%) and “quality and certification” (58%). A good deal of environmental
information was presented without distinguishing between specific areas: the “overall” disclosure was
71%. In 2010 these items maintained their importance. From 2005 to 2010 some areas of
environmental disclosure became more prominent, such as “products and services” (from 21% to
3 Neutral news was not considered in the regression model since it was not relevant for the analysis.
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42%), “materials” (from 29% to 44%), and other received less attention such as “transport” /from 25%
to 4%).
Regarding the employee matters the data show that in 2005 the most disclosed items were
“employment” (88%), followed by “training-education” (85%) and “communication” (81%). In 2010,
further information about “occupational health and safety” (+19%) was also introduced in the
disclosure. There is no significant difference between companies that operate in environmentally
sensitive sectors, except for information about “products and services”.
[Insert here Table 2]
By investigating the extent of the disclosure before and after regulation for each one of the employed
variables, Table 3, 4 and 5 show the number of sentences devoted to each one of the sub-variables
identified for the analysis.
In detail, 9,187 sentences have been employed overall in 2005 consolidated financial reports (1,827
sentences) and social-environmental reports (7,360 sentences). In 2010 12,686 sentences (2,197 and
10,489, respectively) were analyzed with an increase of 38%. That means that the overall VOLUME of
the disclosure rose significantly between 2005 and 2010.
The analysis reveals that Italian listed corporate groups paid equal attention to environmental and
employee matters. In 2005 4,531 (50%) sentences were addressed to environmental themes and 4,656
were oriented to employees (50%). In 2010 there was a slight increase in information about
environmental concerns (6,519; 51%). More specifically, in 2005 45% of the total volume about
environmental issues concerns “general aspects related to the sector of activity” which are not directly
or indirectly related to the impact of the activity on the environment, but are mainly related to the
description of the business activity of the company, such as the multi-utilities. About employee
matters, in 2010 the relevance of “general aspects” decreases to 32%.
[Insert here Table 3]
By analyzing the COMPLETENESS of environmental and employee themes, Table 3 shows that from
2005 to 2010 there is an increase in the COMPLETENESS variable because both descriptive and
evaluating pieces of information have increased. In detail the number of evaluating issues has
increased both numerically (from 1,816 in 2005 to 2,676 in 2010) and proportionally (from 20% in
2005 to 21% in 2010). The number of descriptive issues has increased both numerically (from 6,020 to
8,710) and proportionally (from 66% to 69%). The number of the vaguest sentences has decreased
(from 15% to 10%).
Some differences emerge also by considering environmental and employee matters separately.
Regarding environmental themes the data shows an increasing amount of information which provides
numerical evaluation (from 19% in 2005 to 23% in 2010) and a reduction of vague and simply
mentioned information (from 16% to 9%). The number of sentences labeled as descriptive increases
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from 2,919 (64%) to 4,415 (68%). Thus, the analysis reveals that information about environmental
issues has improved in the last five years, but information regarding employee matters has become
more descriptive and few numerical evaluative issues are presented in the analyzed reports of Italian
listed groups.
[Insert here Table 4]
By analyzing the presence or absence of GOOD and BAD NEWS, this study is consistent with other
pieces of research (Guthrie & Parker, 1990; Deegan & Gordon, 1996; Criado-Jimenez et al., 2008).
Italian listed companies are indeed more likely to give account of their good news instead of bad news
and this behavior tends to be more frequent in 2010. Indeed, in 2005 only 0.7% of the total disclosure
deals with bad news; in 2010 this percentage slightly decreases to 0.6%.
Moreover, without considering neutral information, i.e. information which does not contain evaluation
judgments about the companies’ activities, the total percentage of sentences devoted to explaining bad
news about company performance decreased from 9% in 2005 to 8% in 2010. There are an increasing
number of sentences on good news about the environmental and employee matters in social and
environmental reporting (both numerically – from 674 to 834, and proportionally – from 91% to 92%).
The data show different patterns when considering environmental or employee matters. Generally
speaking, in 2005 the disclosure about bad news mostly regards employee issues (55% of the total bad
news in 2005); while in 2010 there is more bad environmental news (53%).
[Insert here Table 5]
Finally, the analysis of PERSPECTIVE INFORMATION shows that companies tend to focus their
reports on the present year without comparing results with previous years (“past” information 17% in
2005 and 16% in 2010) and by giving less attention to future-oriented news (“future” information 4%
in 2005 and 3% in 2010). Past information is preferred, since the reports contain more comparisons
between the current year and the past year.
The statistics presented in Table 5 show that the consolidated financial and social-environmental
reports are still used as instruments to give an account of present environmental and employee matters
and their role as tools to give a more complete overview about the past and the future impact of
business activity is still low.
By considering environmental and employee matters separately the data do not show significant
differences between these areas of disclosure.
4.2 Pearson Correlation and Regression Analysis
The strength of a linear relationship can be measured using the Pearson Correlation Coefficient whose
values can range from –1 to +1. Using the Sig. (2-tailed) value, we can determine whether the
-14-
correlation is a significant one. The Null Hypothesis is that the Correlation Coefficient is zero (or close
enough to be taken as zero), and we reject this at the 5% level if the significance is less than 0.05. The
research software tools flag the Correlation Coefficients with an asterisk if they are significant at the
5% level. We can see in our sample that there are significant positive correlations for each pair of
variables when one of the two considered variables is activity sector sensitiveness for all the three
considered variables.
The analysis shows that there are no significant linear relationships between the examined variables
when we consider the 2007 regulation. Taking into account the interaction between the two mentioned
variables (i.e. activity sector sensitiveness and 2007 regulation) we obtain some positive significant
relations.
[Insert here Table 6, 7, 8]
After analysis of the Pearson Correlation Coefficient, we may investigate more deeply the activity
sector sensitiveness impact (as an independent variable) by applying regression model [A] and [B] to
the COMPLETENESS, GOOD/BAD NEWS and PERSPECTIVE INFORMATION. Because of
variable significance, only three regression analyses will be presented in detail.
[Insert here Table 9, 10, 11]
As has emerged from the above mentioned descriptive statistics, evaluation, bad news and past
information require more investigation since they have registered high increases between 2005 and
2010.
Tables 9,10 and 11 tell us how well we are explaining the dependent variables in terms of three
independent variables, i.e. 2007 regulation, environmentally impactful sector, and their interaction. R-
Squared (i.e. the proportion of variability in the dependent variable that can be explained by changes in
the values of the independent variables) is not so high, which means that the model does not fit well to
the data. The ANOVA table indicates that there is a significant Linear Relationship between the
dependent variable and the explanatory variable (we do have a significant linear equation because p-
value is equal to 0.000). An F test is used to test the Null Hypothesis that there is no Linear
Relationship and compare the two models [A] and [B] previously described. We have evidence that,
with a significance value (Prob>F) of less than 0.05, there is a significant linear relationship.
Moreover, looking at the columns headed t and Sig., we can see the significance level for the variable.
In detail, all the regressions demonstrate that model B fits the data since the environmental impactful
sector of activity better explains the variation from 2005 to 2010 in the extent of the disclosure about
employee and environmental matters.
-15-
5) Concluding remarks The paper gives the opportunity to reflect about environmental and employee matters in the reports of
Italian listed companies: it highlights how the overall disclosure of these companies has changed in the
last five years. We are aware that in recent years environmental and worker issues are becoming
important in the evaluation system of corporate performance. The examined 2007 regulation belongs
to this tendency, which makes Italian companies to pay an increasing attention also towards “non-
financial information”. More specifically, the results reveal a double effect: on one side there are more
listed companies that in 2010 produced a stand-alone social-environmental report (53 in 2010 and 35
in 2005). On the other side, the analysis demonstrates that there is growing attention to non-financial
information also in consolidated annual reports.
-16-
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Tables and Figures
Table 1: Variables employed in the analysis
Variable Category Example
COMPLETENESS
Mention “In almost all municipalities is also guaranteed the cleanliness of public
environment”
Description “All operations follow established procedures in accordance with the
company doctor, the Internal Service for Prevention and Protection and
Health Services Company experts responsible for the area, technicians
who are always consulted, especially in non-conventional cases”.
Evaluation “In 2005 more than 120,000 hours of training have been provided to
staff, with a total investment of about € 2.9 m.”
GOOD NEWS
Good News “The commitment to organizational and educational issues has been
positively reflected on accidents: in 2005, the number of accidents in
the unit of Trieste was 39, compared to 58 in 2004 (-32.75%), with a
net improvement over the previous year is the frequency index and the
severity of injuries”
Neutral News “Employees who work in network construction are professionally
trained and in possession of licenses and certificates of competency and
qualification”
Bad News “As a consequence of an improvement of the frequency, there is a
significant worsening in the severity in the cement sector (+24%),
which reported lesser injuries, but on average more severe”
PLANNING
Past “The volume of gas injected into the system in Trieste in 2005 was
approximately 179.3 million cubic meters, an increase of 3.9% over the
previous year”.
Present “Workers with part-time contract- 50% (14 of 26) of whom is
employed at headquarters - are in no way discriminated against in the
continuation and development of their careers for the type of contract
adopted.”
Future “Reducing emissions in the atmosphere of corporate fleets (through
methane, biodiesel, hybrid, etc..): Target: 20% of vehicles should be
with reduced environmental impact to 2009."
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Table 2: Presence of environmental and employee matters in consolidated financial reports and social-
environmental reports.
Panel A: Environmental Matters 2005 2010 F. % F. % Materials 14 29% 21 44% Energy 31 65% 39 81% Water 18 38% 20 42% Biodiversity 8 17% 13 27% Emissions, effluents and waste 32 67% 35 73% Products and service 10 21% 20 42% Compliance 7 15% 12 25% Transport 12 25% 2 4% Overall 34 71% 39 81% Quality and certification 28 58% 28 58% General aspect 32 67% 34 71% Panel B: Employee Matters 2005 2010 F. % F. % Employment 42 88% 47 98% Labour/management relations 29 60% 27 56% Occupational health and safety 30 63% 39 81% Training and education 41 85% 45 94% Diversity and equal opportunity
26 54% 25 52%
Development politics 37 77% 39 81% Social initiatives 29 60% 32 67% Communications 39 81% 38 79% Company's climate 9 19% 12 25% Questions of law 7 15% 11 23%
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Table 3. The extent of the completeness.
Completeness Mention Description Evaluation Total
2005 2010 2005 2010 2005 2010 2005 2010
Environment
Social reports 351 10%
266 5%
2,424 66%
3,519 66%
870 24%
1,515 29%
3,645 100%
5,299 100%
Consolidated
annual reports
386 44%
322 26%
495 56%
896 73%
5 1%
2 0,2%
886 100%
1,220 100%
∑ 737 16%
588 9%
2,919 64%
4,415 68%
875 19%
1,517 23%
4,531 100%
6,519 100%
Employees
Social reports 252 7%
292 6%
2,525 68%
3,740 72%
938 25%
1,158 22%
3,715 100%
5,190 100%
Consolidated
annual reports
362 38%
421 43%
576 61%
555 57%
3 0%
1 0%
941 100%
977 100%
∑ 614 13%
713 12%
3,101 67%
4,295 70%
941 20%
1,159 19%
4,656 100%
6,167 100%
Total
Social reports 603 8%
558 5%
4,949 67%
7,259 69%
1,808 25%
2,673 25%
7,360 100%
10,489 100%
Consolidated
annual reports
748 41%
743 34%
1,071 59%
1,451 66%
8 0%
3 0%
1,827 100%
2,197 100%
∑ 1,351 15%
1,301 10%
6,020 66%
8,710 69%
1,816 20%
2,676 21%
9,187 100%
12,686 100%
-25-
Table 4. The extent of bad and good news.
Bad and Good news
Neutral Bad Good Total
2005 2010 2005 2010 2005 2010 2005 2010
Environment
Social reports 3,484 4,994 18 28 142 277 3,645 5,299 96% 94% 1% 1% 4% 5% 100% 100%
Consolidated
annual reports
653 935 11 13 222 272 886 1,220
74% 77% 1% 1% 25% 22% 100% 100%
∑ 4,137 5,929 29 41 364 549 4,531 6,519
91% 91% 1% 1% 8% 8% 100% 100%
Employees
Social reports 3,612 5,068 30 20 73 102 3,715 5,190 97% 98% 1% 0% 2% 2% 100% 100%
Consolidated
annual reports
698 778 6 16 237 183 941 977 74% 80% 1% 2% 25% 19% 100% 100%
∑ 4,310 5,846 36 36 310 285 4,656 6,167 93% 95% 1% 1% 7% 5% 100% 100%
Total
Social reports 7,096 10,062 48 48 215 379 7,360 10,489 96% 96% 1% 0% 3% 4% 100% 100%
Consolidated
annual reports
1,351 1,713 17 29 459 455 1,827 2,197
74% 78% 1% 1% 25% 21% 100% 100%
∑ 8,447 11,775 65 77 674 834 9,187 12686
92% 93% 1% 1% 7% 7% 100% 100%
-26-
Table 5. The extent of the perspective information
Perspective
Past Present Future Total
2005 2010 2005 2010 2005 2010 2005 2010
Environment
Social reports 225 375 3,279 4,773 140 151 3,645 5,299 6% 7% 90% 90% 4% 3% 100% 100%
Consolidated
annual reports
555 757 258 392 73 71 886 1,220 63% 62% 29% 32% 8% 6% 100% 100%
∑ 780 1,132 3,537 5,165 213 222 4,531 6,519
17% 17% 78% 79% 5% 3% 100% 100%
Employees
Social reports 162 240 3,413 4,749 140 201 3,715 5,190
4% 5% 92% 92% 4% 4% 100% 100%
Consolidated
annual reports
643 685 266 282 32 10 941 977
68% 70% 28% 29% 3% 1% 100% 100%
∑ 805 925 3,679 5,031 172 211 4,656 6,167
17% 15% 79% 82% 4% 3% 100% 100%
Total
Social reports 387 615 6,692 9,522 280 352 7,360 10,489 5% 6% 91% 91% 4% 3% 100% 100%
Consolidated
annual reports
1,198 1,442 524 674 105 81 1,827 2,197
66% 66% 29% 31% 6% 4% 100% 100%
∑ 1,585 2,057 7,216 10,196 385 433 9,187 12,686
17% 16% 79% 80% 4% 3% 100% 100%
-27-
Table 6. Pearson Correlation: Completeness
Correlazioni
regulation sector both MENTION DESCRIPTION EVALUATION
regulation Correlazione di Pearson 1 ,000 ,447** -,027 ,332* ,251
Sig. (2-code) 1,000 ,001 ,857 ,021 ,085
N 48 48 48 48 48 48
sector Correlazione di Pearson ,000 1 ,632** ,502** ,471** ,535**
Sig. (2-code) 1,000 ,000 ,000 ,001 ,000
N 48 48 48 48 48 48
both Correlazione di Pearson ,447** ,632** 1 ,312* ,536** ,516**
Sig. (2-code) ,001 ,000 ,031 ,000 ,000
N 48 48 48 48 48 48
MENTION Correlazione di Pearson -,027 ,502** ,312* 1 ,568** ,645**
Sig. (2-code) ,857 ,000 ,031 ,000 ,000
N 48 48 48 48 48 48
DESCRIPTION Correlazione di Pearson ,332* ,471** ,536** ,568** 1 ,882**
Sig. (2-code) ,021 ,001 ,000 ,000 ,000
N 48 48 48 48 48 48
EVALUATION Correlazione di Pearson ,251 ,535** ,516** ,645** ,882** 1
Sig. (2-code) ,085 ,000 ,000 ,000 ,000
N 48 48 48 48 48 48
**. La correlazione è significativa al livello 0,01 (2-code).
*. La correlazione è significativa al livello 0,05 (2-code).
-28-
Table 7. Pearson Correlation: Bad and Good News
Correlazioni
regulation sector both GOOD BAD
regulation Correlazione di Pearson 1 ,000 ,447** ,132 ,053
Sig. (2-code) 1,000 ,001 ,370 ,719
N 48 48 48 48 48
sector Correlazione di Pearson ,000 1 ,632** ,432** ,525**
Sig. (2-code) 1,000 ,000 ,002 ,000
N 48 48 48 48 48
both Correlazione di Pearson ,447** ,632** 1 ,383** ,302*
Sig. (2-code) ,001 ,000 ,007 ,037
N 48 48 48 48 48
GOOD Correlazione di Pearson ,132 ,432** ,383** 1 ,371**
Sig. (2-code) ,370 ,002 ,007 ,009
N 48 48 48 48 48
BAD Correlazione di Pearson ,053 ,525** ,302* ,371** 1
Sig. (2-code) ,719 ,000 ,037 ,009
N 48 48 48 48 48
**. La correlazione è significativa al livello 0,01 (2-code).
*. La correlazione è significativa al livello 0,05 (2-code).
-29-
Table 8. Pearson Correlation: Perspective information
Correlazioni
regulation sector both PAST PRESENT FUTURE
regulation Correlazione di Pearson 1 ,000 ,447** ,156 ,280 ,052
Sig. (2-code) 1,000 ,001 ,288 ,054 ,726
N 48 48 48 48 48 48
sector Correlazione di Pearson ,000 1 ,632** ,608** ,467** ,361*
Sig. (2-code) 1,000 ,000 ,000 ,001 ,012
N 48 48 48 48 48 48
both Correlazione di Pearson ,447** ,632** 1 ,587** ,492** ,086
Sig. (2-code) ,001 ,000 ,000 ,000 ,559
N 48 48 48 48 48 48
PAST Correlazione di Pearson ,156 ,608** ,587** 1 ,580** ,330*
Sig. (2-code) ,288 ,000 ,000 ,000 ,022
N 48 48 48 48 48 48
PRESENT Correlazione di Pearson ,280 ,467** ,492** ,580** 1 ,379**
Sig. (2-code) ,054 ,001 ,000 ,000 ,008
N 48 48 48 48 48 48
FUTURE Correlazione di Pearson ,052 ,361* ,086 ,330* ,379** 1
Sig. (2-code) ,726 ,012 ,559 ,022 ,008
N 48 48 48 48 48 48
**. La correlazione è significativa al livello 0,01 (2-code).
*. La correlazione è significativa al livello 0,05 (2-code).
-30-
Table 9. Regression Analysis: evaluation
Anovac
Modello
Somma dei
quadrati df
Media dei
quadrati F Sig.
1 Regressione 87529,354 3 29176,451 8,242 ,000a
Residuo 155754,625 44 3539,878
Totale 243283,979 47
2 Regressione 69552,667 1 69552,667 18,416 ,000b
Residuo 173731,313 46 3776,768
Totale 243283,979 47
a. Predittori: (Costante), both, regulation, sector
b. Predittori: (Costante), sector
c. Variabile dipendente: EVALUATION
Coefficientia
Modello
Coefficienti non standardizzati
Coefficienti
standardizzati
t Sig. B
Deviazione
standard Errore Beta
1 (Costante) 53,875 14,874 3,622 ,001
regulation 25,375 21,035 ,178 1,206 ,234
sector 65,125 25,763 ,431 2,528 ,015
both 31,250 36,434 ,164 ,858 ,396
2 (Costante) 66,563 10,864 6,127 ,000
sector 80,750 18,817 ,535 4,291 ,000
a. Variabile dipendente: EVALUATION
-31-
Table 10. Regression Analysis: bad news
Anovac
Modello
Somma dei
quadrati df
Media dei
quadrati F Sig.
1 Regressione 301,104 3 100,368 5,866 ,002a
Residuo 752,812 44 17,109
Totale 1053,917 47
2 Regressione 290,510 1 290,510 17,505 ,000b
Residuo 763,406 46 16,596
Totale 1053,917 47
a. Predittori: (Costante), both, regulation, sector
b. Predittori: (Costante), sector
c. Variabile dipendente: BAD
Coefficientia
Modello
Coefficienti non standardizzati
Coefficienti
standardizzati
t Sig. B
Deviazione
standard Errore Beta
1 (Costante) ,687 1,034 ,665 ,510
regulation 1,063 1,462 ,113 ,727 ,471
sector 6,063 1,791 ,610 3,385 ,002
both -1,688 2,533 -,134 -,666 ,509
2 (Costante) 1,219 ,720 1,692 ,097
sector 5,219 1,247 ,525 4,184 ,000
a. Variabile dipendente: BAD
-32-
Table 11. Regression Analysis: past
Anovac
Modello
Somma dei
quadrati df
Media dei
quadrati F Sig.
1 Regressione 76059,042 3 25353,014 11,412 ,000a
Residuo 97748,875 44 2221,565
Totale 173807,917 47
2 Regressione 64170,042 1 64170,042 26,923 ,000b
Residuo 109637,875 46 2383,432
Totale 173807,917 47
a. Predittori: (Costante), both, regulation, sector
b. Predittori: (Costante), sector
c. Variabile dipendente: PAST
Coefficientia
Modello
Coefficienti non standardizzati
Coefficienti
standardizzati
t Sig. B
Deviazione
standard Errore Beta
1 (Costante) 48,938 11,783 4,153 ,000
regulation 1,000 16,664 ,008 ,060 ,952
sector 50,812 20,409 ,398 2,490 ,017
both 53,500 28,863 ,331 1,854 ,071
2 (Costante) 49,438 8,630 5,728 ,000
sector 77,563 14,948 ,608 5,189 ,000
a. Variabile dipendente: PAST
-33-
Appendix
Table A: The sample
Sector of activity ID Name of the CG Name of the report Year of the report ID (2005 and 2010)
Banking
1 Banca Carige Social Report 2005 and 2010 1
2 Banca Monte dei Paschi di Siena Social Responsibility Report 2005 and 2010 2
3 Banca piccolo credito valtellinese Social Report 2005 and 2010 3
4 Banca Popolare dell'Etruria Social Report 2005 and 2010 4
5 Banca Popolare di Milano Social Report 2005 and 2010 5
6 Banca Popolare di Spoleto Social Report 2010
7 Banca Popolare società cooperativa
Social Report 2010
8 BNL Social Report 2005 and 2010 6
9 Intesa San Paolo Social Report 2010
10 Unicredit Sustainability Report 2005 and 2010 7
11 UBI Social Report 2010
12 Unipol gruppo finanziario Sustainability plan 2005 and 2010 8
Insurance
13 Gruppo Generali Sustainability Report 2010
14 Fondiaria - Sai Social Report 2005 and 2010 9
15 Mediolanum Social Report 2010
16 Cattolica Assicurazioni Social Report 2005 and 2010 10
Public Utilities
17 A2A Sustainability Report 2010
18 Acea Sustainability Report 2005 and 2010 11
19 Acegas Aps Integrated Report 2005 and 2010 12
20 Falck Renewables Social and environmental report 2010
21 Hera Sustainability Report 2005 and 2010 13
22 Iren Sustainability Report 2005 and 2010 14
23 Terna Social and environmental report 2010
24 Finmeccanica Social and environmental report 2010
25 Impreglio Environmental report 2010
26 Italcementi Social and environmental report 2005 and 2010 15
27 Prysmian Sustainability Report 2010
28 Servizi italia Sustainability Report 2010
Constructions
29 Buzzi Unicem Sustainability Report 2005 and 2010 16
30 Cementir Holding Environmental report 2010
31 Gruppo Ceramiche Ricchetti Sustainability Report 2010
Assets
32 Brioschi Sustainability Report 2010
33 Igd immobiliare Sustainability Report 2010
34 Prelios spa Sustainability Report 2010
Automotive
35 Fiat Sustainability Report 2005 and 2010 17
36 Piaggio & C Sustainability Report 2010
37 Pirelli & C. Sustainability Report 2005 and 2010 18
Travel and Leasure
38 Autogrill Sustainability Report 2005 and 2010 19
39 Fnm Sustainability Report 2010
40 Lottomatica Social Report 2010
-34-
Energy
41 Enel Sustainability and Environmental Report
2005 and 2010 20
42 Edison Social Reponsibility 2005 and 2010 21
43 Eni Integrated Report 2010
44 Erg Sustainability Report 2010
45 Saras Environmental Declaretion 2010
Products to people 46 Indesit company Sustainability Report 2005 and 2010 22
47 Poltrona Frau Sustainability Report 2010
Tecnology
48 Eurotech Sustainability Report 2010
49 Sabaf Social and environmental performance
2005 and 2010 23
50 Itway Social and Sustainability report 2010
Media 51 RCS Mediagroup Report and Relations 2010
Chemistry 52 SOL Environmental Health and Safety
Report 2010
Telecommunications 53 Telecom Sustainability Report 2005 and 2010 24
-35-
Table B: The area of disclosure for environment
ID Area Description
1 Materials see GRI – G3
2 Energy see GRI – G3
3 Water see GRI – G3
4 Biodiversity see GRI – G3
5 Emissions, Effluents, and Waste see GRI – G3
6 Products and Services see GRI – G3
7 Transport see GRI – G3
8 Overall see GRI – G3
9 Quality and Certifications It refers to information regarding environmental certificate or quality assurance
10 General aspect related to the sector of
activity4
It refers to information referred to environment that do not measure the impact of
activities on environment but simply describe some activities
11 Other Residual aspects
4 Please note that category n. 10 of Environmental aspects refers to all the information about the environment that do not directly or indirectly deal with the environmental impact of the companies’ activities but simply describe environmental activities.
-36-
Table C: The area of disclosure for human resources
ID Area Description
1 Employment see GRI – G3
2 Labor/Management Relations see GRI – G3
3 Occupational Health and Safety see GRI – G3
4 Training and Education see GRI – G3
5 Diversity and Equal Opportunity see GRI – G3
6 Development Politics It refers to politics and initiatives devoted to promote the
advancement of career into the company
7 Social initiatives It refers to initiatives which deal with sport activities, heath
projects, family activities for the employee
8 Communication It refers to all the forms of internal communications developed
in favor of employee
9 Company’s climate It refers to the employee satisfaction about the climate of the
company
10 Question of law It refers to
11 Other Residual aspects
-37-
Table D: Completeness: results for stand-alone social reports.
Panel 1: Environmental matters
MENTION DESCRIPTION EVALUATION TOTAL
2005 2010 2005 2010 2005 2010 2005 2010
Materials 36
23% 15 6%
105 68%
152 59%
14 9%
90 35%
155 100%
257 100%
Energy 23 6%
31 4%
256 62%
488 60%
134 32%
291 36%
413 100%
810 100%
Water 24
13% 28 8%
117 62%
196 58%
47 25%
112 33%
188 100%
336 100%
Biodiversity 0
0% 8
5% 52
80% 128 84%
13 20%
17 11%
65 100%
153 100%
Emissions 44 6%
83 6%
501 70%
862 64%
173 24%
394 29%
718 100%
1339 100%
Products and services 9
16% 2
1% 24
43% 94
68% 23
41% 42
30% 56
100% 138
100%
Compliance 2
4% 0
0% 43
88% 63
72% 4
8% 25
28% 49
100% 88
100%
Transport 1
1% 11 5%
61 62%
140 66%
36 37%
62 29%
98 100%
213 100%
Overall 26
12% 29
10% 149 69%
203 68%
40 19%
67 22%
215 100%
299 100%
Quality 64
28% 25
12% 141 63%
157 76%
20 9%
25 12%
225 100%
207 100%
General aspect 121 8%
33 2%
968 67%
1,029 71%
364 25%
387 27%
1,453 100%
1,449 100%
Total 351 10%
266 5%
2,424 66%
3,519 66%
870 24%
1,515 29%
3,645 100%
5,299 100%
Panel 2: Employee matters
Employment 10 4%
14 4%
104 37%
128 35%
170 60%
224 61%
284 100%
366 100%
Labour/management relations 14 5%
10 2%
233 76%
382 78%
60 20%
97 20%
307 100%
489 100%
Occupational health and safety 33 8%
54 7%
330 75%
557 75%
76 17%
135 18%
439 100%
746 100%
Training and education 47 7%
92 9%
472 66%
755 70%
197 28%
235 22%
716 100%
1,082 100%
Diversity and equal opportunity
8 4%
14 3%
116 61%
321 76%
65 34%
87 21%
189 100%
422 100%
Development politics 64 7%
72 6%
616 68%
923 75%
221 25%
242 20%
901 100%
1,237 100%
Social initiatives 29
11% 11 4%
183 67%
213 72%
63 23%
70 24%
275 100%
294 100%
Communications 42 9%
17 4%
397 81%
363 88%
51 10%
34 8%
490 100%
414 100%
Company's climate 5
5% 8
8% 69
70% 76
75% 24
24% 18
18% 98
100% 102
100%
Questions of law 0
0% 0
0% 5
31% 22
58% 11
69% 16
42% 16
100% 38
100%
Total 252 7%
292 6%
2,525 68%
3,740 72%
938 25%
1,158 22%
3,715 100%
5,190 100%
Total volume 603 7%
558 6%
4,949 68%
7,259 72%
1,808 25%
2,673 22%
7,360 100%
10,489 100%
-38-
Table E: Bad and Good news: results for stand-alone social reports.
Panel 1: Environmental matters
NEUTRAL BAD GOOD TOTAL
2005 2010 2005 2010 2005 2010 2005 2010
Materials 151 97%
248 96%
1 1%
0 0%
3 2%
9 4%
155 100%
257 100%
Energy 397 96%
764 94%
1 0%
2 0%
15 4%
44 5%
413 100%
810 100%
Water 180 96%
318 95%
1 1%
1 0%
7 4%
17 5%
188 100%
336 100%
Biodiversity 61
94% 152 99%
0 0%
0 0%
4 6%
1 1%
65 100%
153 100%
Emissions 656 91%
1223 91%
3 0%
10 1%
59 8%
106 8%
718 100%
1339 100%
Products and services 54
96% 135 98%
0 0%
0 0%
2 4%
3 2%
56 100%
138 100%
Compliance 41
84% 69
78% 7
14% 13
15% 1
2% 6
7% 49
100% 88
100%
Transport 90
92% 207 97%
1 1%
1 0%
7 7%
5 2%
98 100%
213 100%
Overall 209 97%
289 97%
0 0%
0 0%
6 3%
10 3%
215 100%
299 100%
Quality 203 90%
179 86%
0 0%
0 0%
22 10%
28 14%
225 100%
207 100%
General aspect 1,433 99%
1,401 97%
4 0%
1 0%
16 1%
47 3%
1,453 100%
1,449 100%
Total 3,484 96%
4,994 94%
18 0%
28 1%
142 4%
277 5%
3,645 100%
5,299 100%
Panel 2: Employee matters
Employment 281 99%
362 99%
0 0%
0 0%
3 1%
4 1%
284 100%
366 100%
Labour/management relations
292 95%
484 99%
4 1%
0 0%
11 4%
5 1%
307 100%
489 100%
Occupational health and safety
410 93%
690 92%
6 1%
14 2%
23 5%
42 6%
439 100%
746 100%
Training and education 693 97%
1,061 98%
4 1%
0 0%
19 3%
21 2%
716 100%
1,082 100%
Diversity and equal opportunity
187 99%
416 99%
0 0%
1 0%
2 1%
5 1%
189 100%
422 100%
Development politics 880 98%
1,227 99%
15 2%
1 0%
6 1%
9 1%
901 100%
1,237 100%
Social initiatives 274
100% 286 97%
0 0%
0 0%
1 0%
8 3%
275 100%
294 100%
Communications 490
100% 412
100% 0
0% 0
0% 0
0% 2
0% 490
100% 414
100%
Company's climate 91
93% 98
96% 0
0% 1
1% 7
7% 3
3% 98
100% 102
100%
Questions of law 14
88% 32
84% 1
6% 3
8% 1
6% 3
8% 16
100% 38
100%
Total 3,612 97%
5,068 98%
30 1%
20 0%
73 2%
102 2%
3,715 100%
5,190 100%
Total volume 7,096 96%
10,062 96%
48 1%
48 0,5%
215 3%
379 4%
7,360 100%
10,489 100%
Total volume (without neutral news)
- - 48
18% 48
11% 215 82%
379 89%
264 100%
427 100%
-39-
Table F: Planning: results for stand-alone social reports.
Panel 1: Environmental matters
PAST PRESENT FUTURE TOTAL
2005 2010 2005 2010 2005 2010 2005 2010
Materials 12 8%
17 7%
137 88%
226 88%
6 4%
14 5%
155 100%
257 100%
Energy 34 8%
63 8%
364 88%
720 89%
15 4%
27 3%
413 100%
810 100%
Water 6
3% 39
12% 180 96%
287 85%
2 1%
10 3%
188 100%
336 100%
Biodiversity 0
0% 3
2% 62
95% 145 95%
3 5%
5 3%
65 100%
153 100%
Emissions 37 5%
156 12%
654 91%
1,152 86%
27 4%
31 2%
718 100%
1,339 100%
Products and services 1
2% 4
3% 53
95% 133 96%
2 4%
1 1%
56 100%
138 100%
Compliance 0
0% 7
8% 48
98% 78
89% 1
2% 3
3% 49
100% 88
100%
Transport 18
18% 10 5%
77 79%
196 92%
3 3%
7 3%
98 100%
213 100%
Overall 4
2% 11 4%
200 93%
282 94%
11 5%
6 2%
215 100%
299 100%
Quality 6
3% 3
1% 197 88%
188 91%
22 10%
16 8%
225 100%
207 100%
General aspect 107 7%
61 4%
1,298 89%
1,357 94%
48 3%
31 2%
1453 100%
1,449 100%
Total 225 6%
375 7%
3,279 90%
4,773 90%
140 4%
151 3%
3,645 100%
5,299 100%
Panel 2: Employee matters
Employment 33
12% 54
15% 251 88%
310 85%
0 0%
2 1%
284 100%
366 100%
Labour/management relations 16 5%
5 1%
286 93%
482 99%
5 2%
2 0%
307 100%
489 100%
Occupational health and safety 30 7%
50 7%
385 88%
664 89%
24 5%
32 4%
439 100%
746 100%
Training and education 32 4%
32 3%
665 93%
1,020 94%
19 3%
30 3%
716 100%
1,082 100%
Diversity and equal opportunity 14 7%
38 9%
166 88%
376 89%
9 5%
8 2%
189 100%
422 100%
Development politics 20 2%
21 2%
858 95%
1,116 90%
23 3%
100 8%
901 100%
1,237 100%
Social initiatives 2
1% 8
3% 269 98%
279 95%
4 1%
7 2%
275 100%
294 100%
Communications 11 2%
22 5%
449 92%
377 91%
30 6%
15 4%
490 100%
414 100%
Company's climate 2
2% 7
7% 70
71% 90
88% 26
27% 5
5% 98
100% 102
100%
Questions of law 2
13% 3
8% 14
88% 35
92% 0
0% 0
0% 16
100% 38
100%
Total 162 4%
240 5%
3,413 92%
4,749 92%
140 4%
201 4%
3,715 100%
5,190 100%
Total Volume 387 5%
615 6%
6,692 91%
9,522 91%
280 4%
352 3%
7,360 100%
10,489 100%
Table G. Pea
arson Correllation Coeffic
cient: results
-40-
for consolidaated annual reports.
Table H. Pea
arson Correllation Coeffic
cient about co
-41-
ompleteness: results for coonsolidated an
nnual reports.
Table I. Pea
arson Correlaation Coeffici
ent about bad
-42-
d/good news: results for coonsolidated a
annual reportts.
Table L. Pea
arson Correlaation Coeffic
ient about pla
-43-
lanning: results for consolidated annua
al reports.
Table M. So
ome regressioon analyses: eenvironmenta
-44-
al description in consolidated annual repports.