Abstract Report - CONSOB AND ITS ACTIVITIES
Report 2022 on non-financial reporting of Italian listed companies
Report 2022 on non-financial reporting of Italian listed companies
| The Report analyses the evidence on the implementation of the Directive 2014/95/EU, transposed in Italy by the Legislative Decree no. 254/2016, also with the aim of highlighting the progressive cultural change triggered by the consideration of sustainability into the corporate decision-making process. ... more |
| The Report analyses, for the fifth year running, examine how Italian companies are implementing the Directive 2014/95/EU (Non-Financial Reporting Directive - NFRD), transposed in Italy by the Legislative Decree no. 254/2016 (the Decree). In line with the methodology already used in previous editions, the analyses refer to companies with ordinary shares listed on the main Italian regulated market (Euronext Milan). They cover those behaviours, also triggered by legislative obligations and developments in self-regulation, that may signal progress in the cultural transformation towards the integration of ESG (Environmental, Social and Governance) factors into the design of business models, corporate strategies and corporate governance models. The first section of the Report covers non-financial statements (NFSs) published pursuant to the Decree, focusing on the materiality analysis carried out by companies, and the Strategic plans presented to investors and available on companies’ websites. The second section of the Report explores the relevance of non-financial issues at the board level, in the light of the evidence gathered from the corporate governance reports and from the guidelines for board renewal. The third part of the Report delves into the integration of non-financial factors into CEO remuneration policies, as defined in the reports on remuneration policy and remuneration paid. |
| Compliance with obligations on non-financial reporting can trigger a cultural transformation of corporate decision-making process that can be traced back to three phases: Awareness, Capabilities, Engagement. In this Report, the first two phases are identified through the analysis of NFSs, corporate governance reports, guidelines for board renewal and reports on remuneration policy and remuneration paid, while the third stage is appraised through the examination of the abstracts of Strategic plans. ... more |
| Awareness is the precondition for change. It originates from compliance with reporting obligations and develops into the acknowledgement of the relevance of ESG factors and of the role they can play in the transformation process, also through the examination of board involvement. During 2022, 148 companies with ordinary shares listed on Euronext Milan published the NFS, accounting for 69% of the stock market list (virtually unchanged from the previous year). In all cases, companies declared that they had prepared the statement based on the results of a materiality analysis, which was submitted to the board of directors in 50% of the cases, representing a slight decrease from the previous year (52.3% of the cases). In addition, board induction training programmes on ESG subjects rose to 58 compared to 53 in 2021. Out of the total number of companies publishing the NFS, the sustainability committee was established in 103 cases (93% of the total, up from 89% of the prior year). Capabilities building is captured with reference to the materiality analysis and consideration of ESG factors at the board level. The latter aspect is evaluated taking into account the relevance that ESG factors have in the context of the board self-assessment process, the induction programmes, the guidelines issued for the renewal of the board and the definition of the remuneration for CEOs. In 2022, as part of updating the materiality analysis, the percentage of companies that involved internal structures or bodies slightly decreased with respect to the previous year, from 87.9% to 86.3%, although involvement of top managers has remained almost the same (about 62%); at the same time, external stakeholder involvement in identification of material topics, equal to 65.8% in 2022, showed a four percentage points increase. In addition, an increase was recorded in the number of companies that put in place non-financial information data collection systems (19% from 17.2% in 2021), whereas the percentage of companies that used platforms for stakeholder engagement or advanced data analytics tools to enrich materiality analysis (about 9%) remained stable. Moreover, non-financial issues were addressed in training programmes for employees and managers by 76.4% of issuers (77.5% in 2021). The integration of ESG factors into self-evaluations concerns 45 companies in 2022 as for the previous year. The consideration of ESG factors in board renewal guidelines marks a decrease from the previous year (from 25 over 49 issuers in 2021 to 19 over 44 in 2022) but anyway an increase with respect to 2020 (19 over 50 issuers) and 2019 (12 over 43). Finally, the integration of ESG criteria into CEO’s remuneration packages rose substantially (127 companies up from 106 in 2021), thus marking a booster of transformation. Engagement represents the last step towards the integration of ESG factors into strategies and business models. In this regard, the Report assessed the abstracts of Strategic plans, presented to investors in road shows and published in the Investor Relation section of the corporate website, in order to verify how and to what extent firms describe their integration strategy between financial and non-financial issues. In 2022, the number of Strategic Plans containing long-term considerations about sustainability and sustainable development goals, or SDGs, has increased with respect to 2021. Furthermore, the number of corporate communication activities increased with respect to the previous year. |
| The Report includes an Addendum in Section 4 with the results of the analysis about the first year of application of the disclosure requirements under Article 8 of the Taxonomy Regulation, based on the NFSs published in 2022 by the 145 Italian companies with listed ordinary and savings shares. ... more |
| The Addendum was prepared by: Stefano Di Iorio - CONSOB, Issuers Information Department (s.diiorio@consob.it) Valeria Gentile - CONSOB, Issuers Information Department (v.gentile@consob.it) Riccardo Santamaria - CONSOB, Issuers Information Department (r.santamaria@consob.it) The authors wish to thank Alessia Palma and Anna Vicinanza for their assistance in the analysis of the data. The Addendum includes analyses on how and to what extent companies' activities are associated with eco-sustainable economic activities as defined in the EU taxonomy legislation (Regulation (EU) 2020/852 - Taxonomy Regulation, which came into force on 12 July 2020). Evidences relates to the first year of implementation of the disclosure requirements under Article 8 of the Taxonomy Regulation, and refer to the information reported in the NFSs published in 2022 by the 145 Italian companies with ordinary and savings listed shares subject to the obligation to prepare the NFS. There is also a specific focus on the relevant information reported by the 33 Italian companies included in the Ftse Mib index at the end of 2021 which published their NFS in 2022. |
The Report was prepared by:
Nadia Linciano (coordinator) - CONSOB, Head of the Research Department (n.linciano@consob.it)
Angela Ciavarella - CONSOB, Corporate Governance Department (a.ciavarella@consob.it)
Giovanna Di Stefano - CONSOB, Research Department (g.distefano@consob.it)
Ilaria Fabbiani - CONSOB, Corporate Governance Department (i.fabbiani@consob.it)
Lucia Pierantoni - CONSOB, Research Department (l.pierantoni@consob.it)
The authors wish to thank Livia Piermattei (Senior Advisor Methodos; Board Advisor for a Sustainable Success; Nedcommunity) for her methodological hints and Susanna Gruttadauria and Alessio Mastroianni for their assistance in the analysis of the data.
The opinions expressed in this Report are the authors’ personal views and are in no way binding on Consob. All rights reserved. Reproduction for scholarly and non-commercial use permitted on condition that the source is cited.
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ISSN 2784-8809 [online]