Environmental Disclosure Under Mandatory Regulation in EU Listed Companies: An Institutional Analysis

ABSTRACT This study examines corporate environmental reporting practices among listed companies in the European Union during the period 2018–2022, within the context of the Non‐Financial Reporting Directive (NFRD). To this end, an Environmental Disclosure Index (EDI) is constructed based on qualitative reporting items, and panel‐data models are estimated incorporating economic and financial variables, sectoral environmental impact profiles and national cultural dimensions. Descriptive results indicate relatively low reporting levels, with a moderate increase over the period analysed, followed by subsequent stabilisation. Multivariate estimations show that firm size is consistently associated with a greater extent of disclosure, whereas profitability and indebtedness do not emerge as systematic determinants. In addition, the findings reveal sectoral and cultural heterogeneity: companies operating in higher‐impact sectors provide more extensive reporting, while certain cultural dimensions display positive associations only in specific model specifications, conditional upon sectoral context and the category of information analysed. Overall, the study provides comparative empirical evidence and reinforces the relevance of Institutional Theory as an interpretative framework for analysing corporate reporting patterns within the European Union.