Received: 30 March 2019 Revised: 2 December 2019 Accepted: 16 December 2019

DOI: 10.1002/csr.1896

RESEARCH ARTICLE

The engagement of stakeholders in nonfinancial reporting:

New information-pressure, stimuli, inertia, under
short-termism in the banking industry

Maura Campra, Full Professor of Accounting1 |

Paolo Esposito, Associate Professor of Accounting2 |
Rosa Lombardi, Associate Professor of Accounting3

1
Department of Economics and Business
Studies, University of Eastern Piedmont
“Avogadro”, Novara, Italy
2
Department of Law, Economics, Management
and Quantitative Methods, Sannio University,
Benevento, Italy
3
Department of Law and Economics of
Productive Activities, University of Rome
“La Sapienza”, Rome, Italy
Correspondence
Associate Professor of Accounting,
Department of Law and Economics of
Productive Activities, University of Rome
“La Sapienza,” Rome, Italy.
Email: rosa.lombardi@uniroma1.it
Abstract
In the past few years, nonfinancial reporting has been a widely debated issue in liter-
ature, not the least because of its importance during times in which topics such as cli-
mate change and social transformations have become strategic issues particularly for
larger companies. Recent regulatory changes within the European legal framework
have marked the transition from a voluntary nonfinancial reporting system to a man-
datory one for larger companies. Unlike the case of manufacturing companies, the
debate surrounding the application of CSR policies in the banking industry has not
been as univocal. Taking into account a case study, we how such pressure is neither
strictly positive nor negative, but it can rather be defined as a stimulating inertia, able
to indicate prompt and sure strategic directions for the Company, to be pursued in a
sustainable manner. This will need the implementation of internationally acknowl-
edged policies and procedures regulating the interactions between the Company and
its stakeholders.

KEYWORDS

banking sector, corporate social responsibility, nonfinancial reporting, short-termism,

stakeholder engagement, sustainable development

1 | I N T RO DU CT I O N
This paper analyses nonfinancial reporting and its relationship with
stakeholder engagement—in the EU banking industry, following recent
regulatory changes introduced in the European legal framework
(Directive 2014/95/EU). This study contributes significantly to the
existing literature because the banking industry appears to have been
generally excluded from studies focusing on sustainable reporting and
corporate social responsibility (CSR; Kiliç, Kuzey, & Uyar, 2015). Also,
very few studies examining the effects of social, environmental, and
sustainable disclosure in the EU banking sector have so far been publi-
shed (Avrampou, Skouloudis, Iliopoulos, & Khan, 2019; Fijałkowska
et al., 2017; Forcadell & Aracil, 2017; Rogošic, 2014; Carnevale,
Mazzuca, & Venturini, 2012; Branco & Rodrigues, 2008). This paper
can therefore be of use to regulatory bodies (Cormier, Ledoux, & Mag-
nan, 2011; Deegan, 2004; Freedman & Jaggi, 2005), organizations
(Coupland, 2006; Gray, Kouhy, & Lavers, 1995; Gray, Javad, Power, &
Sinclair, 2001; Halme & Huse, 1997; Hackston & Milne, 1996; Lin-
dblom, 1994;), the banking sector, and the stakeholders involved
(Kudratova, Huang, Kudratov, & Qudratov, 2019; Alniacik, Alniacik, &
Genc, 2011; Campra and Esposito, 2018; Venturelli, Cosma, &
Leopizzi, 2018; Leopizzi, Iazzi, Venturelli, & Principale, 2019;
Clarkson, 1995).
This paper aims to achieve its research objectives through a case
study (Yin, 1995) analysis focusing on the Intesa Sanpaolo Group,
which was carried out through both a document analysis (Bowen,

Corp Soc Responsib Environ Manag. 2020;1–9. wileyonlinelibrary.com/journal/csr © 2020 John Wiley & Sons, Ltd and ERP Environment 1
2 CAMPRA ET AL.
2009), and by using semistructured interviews to key actors in the
creation of nonfinancial reporting and the mapping of stakeholder
engagement. Starting from describing how CSR has been adopted
across the banking industry, this paper seeks to fill the gap in non-
financial reporting literature by focusing on the relevance of value in
banks, a topic which has been to some extent neglected by literature
and still a matter of debate. This study contributes to the academic lit-
erature by analyzing/examining the relationship between nonfinancial
reporting and stakeholder engagement, in particular under conditions
of short-termism. Our analysis presents a theoretical background we
feel can be useful to both scholars and practitioners. In particular, this
study contributes towards identifying nonfinancial reporting strate-
gies, with implications on both accounting and corporate management
policies. This is achieved by investigating and observing whether and
how—in the Italian case—key CSR factors determine the quality of
nonfinancial reporting in the banking industry. The Italian scenario
represents in fact a context that has been investigated to a lesser
extent compared with other countries in terms of the existence, size,
and quality of the aforementioned determinants of stakeholder
engagement.
This paper is organized as follows: Section 2 focuses on the theo-
retical framework and on a review of the current literature; Section 3
presents the methodology and research design adopted, whereas
Section 4 presents the case study regarding the Intesa Sanpaolo
Group. Finally, Section 5 highlights the implications and limitations
related to the results achieved, while indicating directions for further
research.
2 | LITERATURE REVIEW
Academic literature focusing on business practice has so far
highlighted some macro-areas within the wider field of social respon-
sibility. Beyond the well-known areas of environmental care (Campra,
Oricchio, Braja, & Esposito, 2014; Lai, Melloni, & Stacchezzini, 2016,
2017), promotion of human rights, and sustainable progress, other
areas of investigation are the overall well-being of staff, product
safety, and compliance towards the legal requirements (Carroll, 1979;
Esposito & Ricci, 2015). While Bonsòn and Bednàrovà (2015) investi-
gated the existence of a link between CSR approaches and reference
countries with relation to the banking sector, the accountability of the
latter has become an increasingly pressing matter. In particular, the
measurement of nonfinancial performance using the aggregated
method seems no longer adequate. Accountability and prompt
decision-making carried out under the pressure brought by stake-
holder engagement require the managers and decision-makers
involved to fully understand how the aggregate financial performance
can affect measurement activities (Esposito, 2013). This is also linked
to a nonfinancial perspective, whereas delays related to the accumula-
tion and depletion processes of strategic resources affect perfor-
mance drivers (Esposito & Ricci, 2014; Esposito & Ricci, 2017). Along
the same line, there is the relationship between nonfinancial reporting
and stakeholder engagement, which is an issue that has not been
properly and thoroughly examined with relation to the banking sector.
For all these reasons, the following literature analysis about non-
financial reporting in the banking sector will focus on two main areas:
the reasons and rationale behind nonfinancial reporting and the rela-
tionship between nonfinancial reporting and stakeholder engagement.
2.1 | Reasons for nonfinancial reporting in the
banking industry
The notion of CSR is not new in the banking sector. Nowadays, it rep-
resents the best option to pursue when it comes to make banking
more attentive to moral principles and issues (Mocan, Rus, Draghici,
Ivascu, & Turi, 2015). Thus, CSR concepts and the related policies of
financial inclusion, a higher credit accessibility for low-income,
microcredit schemes, and sustainable development (Avrampou et al.,
2019) have now become widespread in the financial services industry
(Scholtens, 2009). Consequently, the adoption of CSR reporting prac-
tices has grown also due to the higher sensitivity and vulnerability of
the banks to issues regarding their reputation and any negative feed-
backs from their stakeholders (Fatma, Rahma, & Khan, 2014). Despite
the increasing relevance, academic literature seems to have failed to
analyse in depth this topic and the persistent inadequacy of CSR dis-
closure within the sector (Mocan et al., 2015).
Soana (2011), examining the correlation between social and finan-
cial performance in Italian banks, highlighted the lack of a significant
link between social implications of banking activities and the core
business of financial institutions. The study showed that investments
in CSR do not bring financial benefits to banks but rather give them
an advantage in terms of corporate image as perceived by their stake-
holders (Akinpelu, et al., 2013). Similar findings are found in Mocan
et al. (2015) and Rendtorff and Mattsson, (2012), which argue that
sound CSR policies contribute towards building a favourable image in
the economic environment where the bank operates. However, it is
safe to assume there is still a gap in literature when it comes to study-
ing and observing the correlation between nonfinancial reporting and
stakeholder engagement in banks listed on the stock market. How-
ever, it is safe to assume there is still a gap in literature when it comes
to studying and observing the correlation between nonfinancial
reporting and stakeholder engagement in banks listed on the stock
market.
2.2 | The relationship between non-financial
reporting and stakeholder engagement in the banking
industry
Many studies on CSR disclosure have failed to include the banking
industry (Kiliç et al., 2015; Siregar & Bachtiar, 2010; Monteiro &
Aibar-Guzmán, 2010; Cormier and Gordon, 2001), and in particular,
there are currently no studies analysing the correlation between non-
financial reporting and stakeholder engagement in banks listed on the
stock market. Although the number of studies examining the issue of
CAMPRA ET AL.
CSR within the banking sector has recently increased, it still seems
inadequate, especially if compared with the significance of the topic
(Kiliç et al., 2015). CSR communication includes information regarding
the Company's attitude and approach towards its environment, com-
munity, employees, and consumers (Gray et al., 2001). The reasons
that push the companies to undertake these practices can be mani-
fold, among which are improving their competitive position and per-
ceived image (Siregar & Bachtiar, 2010); enhancing the relationships
they entertain with customers, communities, and governments
(Cormier et al., 2011; Williams & Pei, 1999); providing accountability
for their activities; and reducing the level of information asymmetry
inevitably existing between their managers and stakeholders (Cormier
et al., 2011; Kiliç et al., 2015). There are also few studies dealing with
the impact of ownership and board composition on CSR practices and
reporting, as well as those that focus on Italian banking (Kiliç et al.,
2015). This study contributes to the extant literature by showing the
existence of a nonlinear relationship between nonfinancial reporting
and stakeholder engagement, a topic which has been so far analysed
only by a handful of scholars (Cormier et al., 2011; Kiliç et al., 2015;
Siregar & Bachtiar, 2010).
The scarcity of such studies depends on the somehow erroneous
perception that the impact of the financial industry's activities is limited
when it comes to pollution, product, or staff safety. Financial institu-
tions, however, indirectly play a crucial role in social and environmental
activities due to the very nature of their core business (Branco & Rodri-
gues, 2008; Douglas, Doris, & Johnson, 2004; Scholtens, 2009). Ana-
lyses with a general focus on the content and extent of the CSR
disclosure in the banking industry were carried out by Leopizzi et al.,
2019; Venturelli et al., 2018; Kiliç et al., 2015; Khan, Halabi, & Samy,
2009 and 2011; Branco & Rodrigues, 2008; Barako & Brown, 2008;
Coupland, 2006. Other scholars focused their attention on more spe-
cific aspects, such as the impact of corporate size, leverage, and profit-
ability (Kudratova et al., 2019) on CSR policies adopted by banks
(Barako & Brown, 2008; Khan, Islam, Fatima, & Ahmed, 2011; Kiliç
et al., 2015) and the effect of CSR disclosure on financial institutions'
market value and/or performance (Carnevale et al., 2012; Kiliç et al.,
2015; Wu & Shen, 2013). To the best of our knowledge, there is no
study focused on the correlation between nonfinancial reporting under
pressures, stimuli, or inertia brought by stakeholder engagement, as well
as the reasons behind CSR reporting in the banking industry.
3 | RESEARCH QUESTION AND
M E TH O DO LO GY
The research topic on nonfinancial reporting is well described by the
sheer volume of data produced by many national and international
institutions. The analysis on the literature review, ultimately aimed at
visualizing a theoretical framework that is then adopted to investigate
the variables affecting the quality of nonfinancial reporting in the Ital-
ian banking industry, with relation to the phenomenon of stakeholder
engagement. Our analysis uses a qualitative approach adopting a case
study method (Yin, 1995). In general, the case study method (Yin,
3
1995) has two main purposes: (a) to describe the main features of the
phenomenon being studied and (b) to understand the dynamics of a
given process. From a strictly methodological point of view, the devel-
opment of a case study represents a “strategy of research that is con-
centrated on the comprehension of the dynamics that characterizes
specific contexts”. The case study method represents therefore in our
case a valuable tool to examine the key factors affecting the relation-
ship between nonfinancial reporting and the pressure brought by
stakeholder engagement and to suggest criteria for further action. The
method adopted is an inductive/deductive one and is both based on a
document analysis and on the assessment of interviews carried out
among key players in the process of CSR disclosure (such as the
Group's CSR manager, the Board of Auditors, Gruppo Bilancio Sociale
standard setters, practitioners, and academics). Our research is based
on a single case study strategy.
Following the research gap and the observation of empirical phe-
nomena not explained by existing interpretative models, in the first
part of our analysis, we will provide answers to the following research
question (RQ):
RQ1: How does nonfinancial reporting develop under the pres-
sure brought by stakeholder engagement?
In order to do that, we will investigate the Italian case study of
the Intesa Sanpaolo banking group that will be investigated through
both a document analysis (Bowen, 2009) and a series of interviews,
focusing on the quality of nonfinancial reporting under pressure
brought by stakeholder engagement. Following the aforementioned
research question, our analysis focuses on two different aspects of
nonfinancial reporting in the banking industry: the reasons behind
nonfinancial reporting and the relationship between nonfinancial
reporting and stakeholder engagement both in the EU and in an Ital-
ian case study. The document analysis has been conducted on many
secondary sources, such as Nonfinancial Statements, Sustainability
Reports, the Materiality Matrix (Intesa SanPaolo, 2018), and the
Company's website (Table 1).
4 | RE S E A R C H F I N D I N G S
Corporate size appears to be the main determinant of CSR disclosure
(Rogošic, 2014), due to the presence of a wider public (more
TABLE 1 Sources used for developing the analysis
Source Case study Code
Documents
Annual reports 2015–2016–2017 A1
Non-Financial Statements/Sustanaibility A2
Report 2016
Non-Financial Statements/Sustanaibility
Report 2017
Materiality Matrix A4
Company website A5
4 CAMPRA ET AL.
stakeholders to relate to) and a greater social awareness regarding the
role played by the Company in the communities where it operates
(Rogošic, 2014). Although the classification in terms of size is usually
determined by criteria set for each country by Central Banks, the main
factor affecting this parameter is the value of the Company's assets
(Rogošic, 2014). The annual report is therefore often used for CSR
and sustainable communication purposes even in the presence of a
separate statement model.
Thus, the CSR report included different categories of corporate
information. This was until 2000, when the Global Reporting Initiative
(GRI) launched the guidelines for the financial sector, setting up spe-
cific indicators of social performance. GRI guidelines became there-
fore the framework of reference for CSR reporting. Findings of some
empirical research on CSR reporting (Rogošic, 2014) show that the
financial performance of banks is considered a key factor in influenc-
ing the online presentation of social responsibility activities. This is
due to the fact that social activities and charities are usually carried
out by those institutions that show a greater surplus, so it can be
assumed that the most profitable banks publish CSR reports on their
official websites (Rogošic, 2014).
Simpson and Kohers (2002) studied the positive impact the adop-
tion of CSR policies has on the financial performance of banks. How-
ever, there is some other academic literature indicating the existence
of a neutral or even negative corporate social performance–corporate
financial performance relationship. This is shown in studies on banks
in Kenya, Turkey, Bangladesh, Hungary, Romania (Mocan et al., 2015),
Croatia (Rogosic, 2014), and Italy (Soana, 2011). Thus, the conceptual
area regarding the production of nonfinancial reporting under pres-
sure from stakeholder engagement, and the nature of such pressure—
whether positive, negative, or neutral due to a sort of inertia in stimu-
lating the sustainability of strategic processes—have been so far virtu-
ally unexamined.
The Directive 2014/95/EU represents an important step forward
with regards to the presentation of sustainability information. It pro-
vides that larger companies and groups (around 400 in Italy and 6,000
across the European Union) must strengthen their commitment and
accountability duties towards their reference communities (Leopizzi
et al., 2019). The European Union has decided in this way to define
certain requirements with relation to CSR information in order to
increase transparency and therefore the level of trust investors and
stakeholders place in larger European companies. Italy implemented
this Directive by passing Legislative Decree No. 254/2016, which
marked the transition from an optional nonfinancial reporting system
to a mandatory one for larger companies. Large Italian banks now
have to provide reliable and thorough nonfinancial information to
attract investors, especially those that pay more attention to sustain-
ability issues (Maglio, Rey, Agliata, & Lombardi, 2019). After the intro-
duction of Legislative Decree no. 254/2016, the operators involved
have highlighted some issues concerning the methodology and proce-
dures to be implemented, that are potentially crucial for compliance
purposes (Socialis, 2018). For this reason, according to a survey by the
Socialis Observatory (2018) for banks, attention to sustainability and
how to assess it is currently on the rise.
4.1 | The Italian banking industry between
nonfinancial reporting and stakeholder engagement
4.1.1 | Analysis of Sustainability Reports from a
sample of Italian banks listed on the FTSE MIB
The analysis of Sustainability Reports from a sample of Italian banks
listed on the Financial Times Stock Exchange Milano Indice di Borsa,
carried out according to the G4 guidelines on Sustainability Reporting
by the GRI (Socialis, 2018), shows that 62% of companies identify the
stakeholders to be included in the Stakeholder Engagement (SE).
Moreover, 75% of companies list Stakeholder Engagement activities,
but none of them highlights those activities aimed at identifying the
issues more likely to affect decisions taken by its interlocutors; only
one of the banks considers reports issues raised by its stakeholders,
and none of them describes processes and procedures put in place to
acknowledge the expectations related to them. It is worth stressing
how this happens despite GRI guidelines clearly indicating that com-
panies should detail how they identify stakeholders, how they decide
who to involve and when, report the way in which stakeholders'
expectations have been met, and how the engagement has affected
the report contents.
Also, this analysis shows that none of the companies taken into
account describes how the impact of corporate activities has been
assessed or how sustainability targets and materiality thresholds have
been defined. More generally, the many informative gaps found lead
one to think that the materiality analysis is adopted to legitimately
restrict the scope and width of the report, bringing to light only those
aspects the company chooses to communicate. This means there is
always the risk of omitting those issues that, while potentially inter-
esting to stakeholders, the company has no interest in reporting or of
producing and presenting information that does not represent a com-
plete picture of the activities carried out by the Company and of their
impact on the environment where it operates (Socialis, 2018). A cor-
rect use of Sustainability Reporting, and the benefits expected from it,
are based on the assumption that the information disclosed is trans-
parent and reflects the true impact of business activities.
Without complete and full transparency, there is the risk for CSR
reporting to turn into another marketing tool, mainly aimed at improv-
ing corporate image and social legitimacy. Bombastic rhetoric and
management control over the whole reporting process can also turn
the Sustainability Report into a sort of simulacrum (Corazza,
Scagnelli, & Mio, 2017): a somehow artificial and idealized representa-
tion of the Company's activities and their impact, which is not entirely
grounded in reality. This, if true, would obviously compromise the reli-
ability of the report and eventually the very credibility of the Com-
pany. If, on the other hand, stakeholders are not involved in the
definition of the report contents, the management might miss the
opportunity to strengthen the bond of trust between the Company
and its stakeholders. A sound interaction with them would instead
allow the management to understand and meet their needs before
otherwise unhappy stakeholders might represent a potential threat to
the Company, this way ensuring its long-term survival (Socialis, 2018).
CAMPRA ET AL.
After EU Directive 2014/95, the Italian banking system was called
to look more in depth at Sustainability Reporting and the creation of
shared value. The analysis of the financial reporting in our case study
regarding the Italian Intesa Sanpaolo Group shows the implementa-
tion of a governance model involving stakeholder engagement activi-
ties. Sustainability issues are addressed here along two lines: (a) by
establishing a set of tools aimed at analysing the degree of alignment
between targets (in terms of value), expectations, and consequent
actions; (b) by organizing the data gathered from a diffused listening
model implemented across an internal shared framework.
The previous trend towards CSR decentralization promoted the
integration of sustainability policies into the Company's daily activi-
ties, making sure that CSR was pursued by individuals as well as by
corporate departments/functional areas. The new model demands
instead the adoption of monitoring and governance systems aimed at
integrating all accounts into one exhaustive picture. Italian Legislative
Decree 254/2016 has therefore marked the passage from the Sus-
tainability Report to the Consolidated Non-Financial Statement, with
the aim of encouraging greater transparency and improving the
chances of comparison with the information provided by other com-
panies (Leopizzi et al., 2019). In the following section, we will investi-
gate the sustainability management of the Intesa Sanpaolo Group,
one of the five largest banking groups in Europe and one of the top-
100 companies in the world, renowned for its CSR policies and stan-
dards. Our case study will refer to the criteria and indices adopted in
the Company's Sustainability Report, which has then become the
Consolidated Non-Financial Statement, before and after the enact-
ment of Legislative Decree no. 254/2016. In doing so, we will take
into account the short-termism issue.
4.2 | The Italian case study analysis
This case study analysis focuses on nonfinancial reporting in the bank-
ing industry, on the basis of two different methodological approaches:
document analysis and interviews.
4.2.1 | Document analysis
We primarily aim to investigate the relationship between nonfinancial
reporting and stakeholder engagement pressure in CSR reporting by
examining the Italian case study of the Intesa Sanpaolo Group, which
is among the largest European banking groups and leader in Italy in
the credit and insurance fields. The study was carried out by analysing
its Non-Financial Statement, before and after the enactment of Legis-
lative Decree 254/2016. All the relevant data were analysed by
highlighting differences with the results from Sustainability Reports
published in previous years (e.g., in 2016). The Intesa Sanpaolo
Group's Non-Financial Statement complies with GRI standards.
Sustainability Reporting originates from aspects of the impact,
whether produced by Intesa Sanpaolo Group's activities on issues
related to stakeholder engagement. Following GRI standards, Intesa
5
Sanpaolo Group has been implementing the Materiality Analysis for
several years. This analysis is visually presented onto two axes making
up the Materiality Matrix, and includes three different steps: identifi-
cation of significant issues to the Company and its stakeholders; prior-
itization of the themes to be addressed and definition of the Matrix;
and validation of the Matrix.
After the enactment in Italy of Legislative Decree no. 254/2016,
the Intesa Sanpaolo Group reviewed the formulation of its priority
issues. Providing all stakeholders with clear definitions, and to come
up with a reliable map of stakeholder engagement, these issues were
defined in terms of priorities, related risks, and specific actions to be
taken (Consiglio Nazionale dei Dottori Commercialisti e degli Esperti
Contabili, 2018). About the Impact on Strategies vertical axis (Figure I)
the Company's interest is shown in relation to its targets and business
strategies, whereas the Stakeholder Relevance horizontal axis presents
stakeholders' expectations and needs.
This method allows to assess the significance (otherwise called
materiality) of each theme, on the basis of its positioning towards the
two axes. The results found are related to the issues considered rele-
vant by the Intesa Sanpaolo Group and previously selected on the
basis of the relevance to the Bank of the stakeholders questioned. In
particular, the Intesa Sanpaolo Group's Materiality Matrix for 2017
shows some deviations compared to the one drawn in 2016, before
the adoption of Legislative Decree 254/2016. The differences are
related to the following issues:
Value and organization soundness: as in the previous year, there
was a slight increase shown on the stakeholder axis. To clients and
investors alike, both risk and asset management are considered rele-
vant; Environmental impact and Green economy: the direct environ-
mental impact is slightly lower than that found in 2016, whereas the
Green Economy area shows a significant increase compared to the
previous year; Community relationship: it is included in the corporate
axis and on the stakeholder axis. Following CSR principles, the trans-
parency and effectiveness of corporate communication is included;
Integrity in the corporate conduct: this topic registered a slight decrease
in relevance to stakeholders, apparently following a parallel increase
in the number of regulatory and operational frameworks. For example,
the fight against corruption is important to both the community stake-
holder and to investors.
Changes are on the other hand not significant with regards to the
following elements: Responsible management of savings: this issue is in
2017 as important as it was the previous year, both to the Company
and to its stakeholders. Clients stressed the importance of an offer of
investment products appropriate to their profile, whereas the commu-
nity and the investors places more importance in the ethical profile of
the bank's investments; Employee development, Employee well-being,
and labour protection: issues regarding the Group's workforce remain
significant both to the Company and to its stakeholders. More specifi-
cally, Investors are interested in aspects such as the training and well-
being of employees; Quality and innovation in the customer relationship:
Employees consider important to establish a good rapport with cli-
ents, who are in turn more focused on simplifying the bureaucracy
and paperwork behind banking and financial products; Suppliers
6 CAMPRA ET AL.
relationship: its social value has been recognized therefore providing
some information on the topic.
4.3 | Data collection
Our main data collection technique was that of conducting interviews.
In total, we interviewed 60 people. Of the interviewees, 55 were men
and 5 were women, reflecting the uneven gender distribution within
the organization. Each interview lasted between 45 min and 2.5 hr. All
the interviews were conducted face-to-face at the Company's pre-
mises, for example, in an office, conference room, or somewhere simi-
lar. An initial round of interviews was carried out in May and June
2019. During this phase, we interviewed a group of three representa-
tives' leaders, a group of strategic managers, and two groups (con-
sisting of three and four people each) of front-line managers. These
initial group interviews were rather unstructured and were aimed at
providing an overview of the Company and identifying the locus of
nonfinancial reporting formation and the mapping processes of stake-
holder engagement. We returned to the company in September and
again in October 2019 for the second and third rounds of individual
interviews. The themes that emerged during the second round were
probed during the third round, by asking the interviewees to renarrate
specific types of interactions and pressure—either positive or
negative—linked to leader and stakeholder engagement. The present
article draws mostly on the 60 interviews conducted during the sec-
ond and third rounds. This sample of interviewees reflects our choice
of bringing an employee perspective into the investigation of interac-
tive nonfinancial reporting formation, rather than adopting a more
leader-oriented perspective in the mapping of stakeholder engage-
ment. The reason why we examined nonfinancial reporting and stake-
holder engagement practices is that they provide us with meaningful
data coming from individuals with extensive experience of such prac-
tices. Our assumption is that such interviewees, even though some-
how affected by their perspective, have also the capacity to reflect
the point of view of the reference leader in their narratives. Because
we asked the interviewees questions, encouraging them to share nar-
ratives regarding the interactions between the Group's leaders and its
customers, stakeholders and shareholders, we especially argue that
interviews were an appropriate tool for mapping the interaction prac-
tices adopted by players in this particular context (Czarniawska, 1998;
Echeverri & Skålén, 2011).
Posing results of some interviews to main key actors, we propose
the following evidence:
The interviews show that the latest set of CSR goals is cur-
rently an integral part of the Group's Business Plan for
2018–2021. Stakeholder engagement activities were carried out in
2018 according with the AA1000 Accountability standard. The
engagement methods adopted by the management were tailor-
made on every stakeholder's needs. The engagement plan was laid
out by strictly interacting with those internal departments that
entertain daily relations with the stakeholders involved. The whole
engagement process was documented in minutes accounting for
all aspects of such interactions and with the approval of all parties
taking part. The stakeholder engagement process took also into
account important factors such as climate change and social trans-
formations, as they are very likely to affect the economic and
financial systems in the near future; as truly strategic factors
(Environment); they now require a close focus by the Group's top
management. Right now, the Group feels it is very important to
integrate Environment, Social, and Governance (ESG) factors in its
policies. The impact of all consequent actions will have to be prop-
erly assessed by adopting widely acknowledged methodologies,
with the relevant results being then effectively communicated to
Small Shareholders.
Thus, the interviews show that the short-termism of nonfinancial
reporting produces a stimulus to the connective circle established by
the interaction between CSR Disclosure and stakeholder engagement,
this way providing a sure direction towards the sustainable configura-
tion of strategic planning processes. In fact, in spite of what the aca-
demic literature has found so far, we cannot exactly write here of a
real pressure produced by stakeholder engagement. It is in fact nei-
ther positive (Helmig, Spraul, & Ingenhoff, 2016) nor negative (Helmig
et al., 2016) but rather an inertial stimulus able to push and accelerate
the Company's strategic management with great timeliness and in a
sustainable manner.
5 | PRIMARY CONCLUSIONS,
LIMITATIONS AND FUTURE RESEARCH
AGENDA
In the light of the previous analysis, stakeholder perception seems to
be a more reliable way to measure CSR. The existing literature has
shown that identifying and measuring CSR on the basis of stakeholder
perception is still a complex task to face (Turker, 2009). Following the
analysis of nonfinancial reporting documents (document analysis), and
the interviews to key players from strategic, accounting, and CSR
management at Intesa Sanpaolo Group, our study has highlighted that
the Group's Non-Financial Statement evaluates whether the manage-
ment has consistently operated in accordance with the stated aims
and values, while at the same time positively responding to stake-
holders' expectations, previously assessed through a systematic pro-
cess of listening and dialogue. According to the Italian Legislative
Decree 254/2016, starting from 2017, the Non-Financial Statement
includes and widens what was previously included in the Sustainabil-
ity Report drawn until 2016.
At Intesa Sanpaolo, sustainability means running a distribution
network attentive to its customers' needs, to reputational recovery,
and to the development of vocational training, with all this being
achieved through a lean and agile (in perceiving and conforming to
change) organizational structure.
From the document analysis and the interviews carried out, it
appears that the most immediate effect caused by the enactment of
Legislative Decree no. 254/2016 on the Intesa Sanpaolo Group's
strategies and organization was the integration of financial statement
CAMPRA ET AL.
data with those—mainly focusing on ESG criteria—that affect the crea-
tion of value for Stakeholders and with the Materiality Matrix. At the
time of our study, ESG criteria were already integrated into balance
sheet analyses at Intesa Sanpaolo. Other criteria were also considered
such as, for example, the Identification of Stakeholders and the Map-
ping/Evaluation of relevant GRI topics.
The document analysis and the interviews we carried out, particu-
larly that with the Group's CSR manager, show that Legislative Decree
254/2016 promoted change for the banking system as a whole, as the
reporting is transversal to each and every sector. It is worth mention-
ing that the commitment to disclosure taken by Intesa Sanpaolo
Group, in the 10 years before the new regimen (for the period
2007/2017) was not entirely mandatory, having the Company already
showing a strong and voluntary commitment to CSR disclosure in
2014, when the first 3-year plan was laid out. In particular, after the
adoption in Italy of Legislative Decree 254/2016, the Non-Financial
Disclosure released by the Intesa Sanpaolo Group for 2017 confirmed
that the model of representation of (low) company risk tends to
remain steady. In the previous 3-year period, company information
referred to the entire range of business risks: credit, strategic, reputa-
tional, and proper reporting risks. The Non-Financial Statement
related to the 2017 balance sheet highlights the strengths of the busi-
ness model adopted: low risk and high operational efficiency without
neglecting the contrast to corruption and money laundering phenom-
ena. Moreover, the operating plan laid out made it possible to boost
company profits and distribute dividends for 3.4 billion EUR, in line
with the 3-year budget plan adopted in 2014. The commitment to
innovation, research, and development, as well as the attention paid
to social (inequality) and environmental risks (greenhouse emissions
and climate change) was renewed.
According to the Declarations published in the 3-year period, the
strategic risk (i.e., the possibility of a fall in profits deriving from the
change in the operating environment or from a negative perception of
the Bank's image by customers or other stakeholders) was not consid-
ered. Nor were considered the operational risk (internal process fail-
ure), the compliance risk (hypothesis of losses due to violation of
regulations), and the risk of incorrect reporting (release of information
part of inaccurate or incomplete reports). In light of a positive devel-
opment of the activities, considering such issues seemed unwise. This
contribution has both theoretical and practical implications. This
study, also by providing a guide to the state-of-the-art with regard to
the subject, contributes significantly to the current literature because
the banking industry has been generally excluded from nonfinancial
(sustainable) reporting and CSR studies (Kiliç et al., 2015). Also, this
analysis allows for the acknowledgement of some key issues by prac-
titioners and policymakers alike, in order to boost the level of legisla-
tive integration within the complex system of the banking industry
and to pursue more and more ambitious goals in sustainable develop-
ment matters (Avrampou et al., 2019). Finally, the element of greater
novelty contained in the present study is the finding according to
which is that the short-termism of nonfinancial reporting produces an
initial inertia on the part of stakeholder engagement and then a posi-
tive stimulus in the construction and sustainable configuration of the
7
strategic process. In spite of what has been found so far by the aca-
demic literature, here, we do not deal with a real pressure brought by
stakeholder engagement, ours being neither of a positive, nor of a
negative nature but rather an inertial stimulus able to provide a
prompt direction to the strategic management of the Company, in a
sustainable way.
Additionally, it appears that the Italian banking system adjusts
investment and credit products available to companies, so as to sup-
port and promote sustainable business models and the long-term
provision of sustainable finance. From the document analysis and
the interviews realized, it appears that the stakeholder engagement
process now inevitably requires to consider factors such as climate
change and social transformations. As they are very likely to affect
the economic and financial systems on a global scale, they have
become strategic factors (particularly the Environment), and as such,
they now require great attention by the top management. The trend
will be more and more about that of integrating ESG factors in strat-
egies and policies laid out by financial institutions. The impact of all
consequent actions will then be assessed through a common stan-
dard and the relevant results be duly communicated to Small
Shareholders.
This paper shows however several limitations, which paves the
way for further research. In particular, the design of the study did not
allow for the use of longitudinal information, so further research might
in future move towards the development of a longitudinal dimension
with regards to the approach adopted (Fatma et al., 2014).
OR CID
Rosa Lombardi https://orcid.org/0000-0003-0470-231X
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