From Stakeholder Pressure to Public Value: The Role of Non‐Financial Reporting in the Waste Management Sector

ABSTRACT The research investigates the creation and destruction of public value in the Italian waste management sector through stakeholder engagement and the quality of nonfinancial reporting (NFR). Drawing on stakeholder theory and public service logic, public value is conceptualized as the result of dynamic relational processes, where stakeholder salience mediates the impact of external pressure on organizational priorities. A structural model is developed and empirically tested using partial least squares structural equation modeling (PLS‐SEM) on a sample of 69 Italian waste management firms disclosing nonfinancial information. The analysis shows that stakeholder pressure (especially from customers and governments) affects the quality and inclusiveness of NFR. High‐quality NFR enhances stakeholder salience by absorbing environmental and social claims into governance and reporting practices, promoting a more responsive and accountable service delivery. Public value is measured by using a hybrid set of indicators combining financial performance (ROI and ROE) with socio‐environmental outcomes (e.g., recycling rates and waste reduction). The findings highlight the strategic importance of participatory, materiality‐driven reporting in fostering public value creation.