The alignment of the financial sector with European sustainability reporting standards: a study of the Italian context

Purpose – Thisstudy examines Italian banks’ alignment with the European Sustainability Reporting Standards (ESRS) established by EFRAG under the new Corporate Sustainability Reporting Directive (CSRD). Given banks’ potential as a driving force for sustainable practices, the aim is to evaluate their adherence to ESRS through recent nonfinancial statements. Design/methodology/approach – A content analysis of recent nonfinancial statements published by Italian banksis performed to assessthe alignment with ESRS standards. Additionally, a t-test was conducted to evaluate potential bank differences based on size, type and adherence to Global Report Initiative (GRI) standards. Findings – The study finds moderate adherence among Italian banks to ESRS standards, with better alignment observed in larger institutions and those reporting GRI-aligned NFS. However, on average, Italian banks will need further adjustmentsto meet ESRS demands by 2025 fully. This highlightsthe significant preparatory work required in measurement and reporting for future compliance. Originality/value – This study contributes to corporate reporting literature and adds insights into the banking sector. By focusing on ESRS compliance in Italian banks, the research underscores current gaps and guides regulatory bodiesto support banks’ transition to new sustainability standards. These findings are pivotal asthey precede the CSRD implementation deadline, offering both theoretical and practical implications for banks and policymakers. The findings may align with policymakers’ concerns, contributing to the ongoing work on the Omnibus Package aimed at streamlining reporting requirements.