The first impact of EU regulation on non-financial disclosure: An exploratory analysis in the oil & gas sector

Directive 2014/95, in force since 2017, is the first European step that requires companies to provide mandatory non-financial information (NFI). The regulation concerns sustainability information with the policy goal of increased accountability and comparability among European “public interest entities” on that matters. According to the framework of Regulatory Integrated Assessment (RIA), the study compares the disclosure before and after the Directive application considering the content (what) and the location of the information in companies‟ reports (where). Content analysis is applied to both financial and non-financial reports to create a disclosure scoring index and an overlapping one. Thus to compare the ex-ante analysis to the ex-post by a quantitative scoring system. The research contributes to the debate on the regulatory policy evaluation examining whether the ex-post assessment reveals a change in companies‟ reporting behaviour about non-financial information, i.e. if the regulation achieves its policy objectives of improving sustainability disclosure. Findings show differences between the ex-ante and the ex-post phase: after the enforcement of the Directive there is an increase in the degree of disclosure (what) and a reduction in the level of overlap (where), with more companies choosing “embedded” reports. These results are a preliminary step in the regulatory policy evaluation and they answer to the request of more studies on the ex-post implementation review of regulation.