Mandatory non-financial reporting in the banking industry: assessing reporting quality and determinants

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European companies that are larger than a specific size have had to comply with reporting requirements on non-financial topics since 2017 under the European Union's Non-Financial Reporting Directive (2014/95/EU), thereby making non-financial reporting (NFR) mandatory. To the best of the author's knowledge, no study has examined the quality of non-financial reporting in banks' compulsory reports over several years. Therefore, the unique objective of this study is to assess the non-financial reporting quality (NFRQ) in the mandatory NFR of the 100 largest banks operating in Germany over three years, and identify reporting-level determinants (experience, format, framework, and audit) that impact NFRQ. A novel framework is developed to measure NFRQ, and different statistical analyses are used to test hypotheses. This study provides notable results: (1) NFRQ in banks' mandatory reporting is below average despite displaying significant positive development over the years; and (2) banks' NFRQ is significantly impacted by three reporting-level determinants (experience, format, and framework). Additionally, this study highlights meaningful implications for theory, practice, and policy on the future of mandatory NFR in the EU.
Original languageEnglish
Article number2073628
JournalCogent Business and Management
Issue number1
Number of pages24
Publication statusPublished - 18.05.2022

Bibliographical note

Publisher Copyright:
© 2022 The Author(s). This open access article is distributed under a Creative Commons Attribution (CC-BY) 4.0 license.

    Research areas

  • Management studies - Banking, Accounting, CSR, banks, directive 2014/95/EU, Germany, mandatory, Non-financial reporting, reporting quality