Disclosure of Material CSR Information in the Periodic Reports – Comparison of the Mandatory CSR Disclosure Systems for Listed Companies in the EU and the US

Abstract

Most of the mandatory CSR disclosure requirements are related to the periodic disclosure documents, such as the financial statement and the accompanying notes, the annual report and the corporate governance report. In the US the disclosure of certain environmental and climate change related information is mandated, while the EU rules require the disclosure of certain non-financial key performance indicators, including information relating to environmental and employee matters. However, in both jurisdictions the disclosure requirements of CSR information are limited and ambiguous. This article analyses the periodic CSR disclosure requirements for listed companies in the EU and the US in detail. It also reflects on the role of materiality or a similar condition in mandating disclosure of CSR related information. Further, it discusses whether it is possible to predict accurately whether a certain piece of CSR information is mandatory to disclose and compares the EU and US periodic disclosure regimes in this respect. The article finds that it is difficult to assess when CSR information is mandatory to disclose and that only certain aspects of the US system can serve as an example for the EU in the ongoing review of the Transparency Directive.

Keywords: Corporate social responsibility, CSR, mandatory, periodic, disclosure, reporting, materiality, Modernisation Directive, listed companies, financial market

JEL Classification: K22