Sustainability reporting in view of the European sustainable finance taxonomy: Is the financial sector ready to disclose circular economy?

Abstract

The European sustainable finance taxonomy requires financial and nonfinancial companies to provide investors with information about the environmental performance of their assets and economic activities. For financial institutions, making socially and environmentally responsible investments visible through a common label that guarantees specific standards for the entire European Union is crucial. Against this background, this study analyzes the evolution of sustainability reporting practices and their assurance in a sample of European financial institutions. To this end, we used a double qualitative methodological approach, based on (a) an external analysis of nonfinancial information and its relationship with the main economic-financial variables of the sample companies, and (b) a case study of a bank carried out through semi-structured interviews. This study provides an external measurement analysis of nonfinancial information in entities from different countries, which can contribute to broadening the scope and level of sustainability and circular economy accountability.