ABSTRACT
This chapter examines the state of non-financial reporting among Croatian companies, assessing improvements in non-financial disclosures between 2017 and 2022 and identifying differences in reporting companies and the impact of industry sectors. The research includes a regulation and literature review and detailed content analysis of 80 non-financial/sustainability reports to examine the compliance of the reports with prescribed requirements, looking at both the quantity and quality of non-financial disclosures. The Wilcoxon Signed Rank Test and Kruskal-Wallis Test were employed for further analysis to provide an in-depth understanding of the country’s current state of sustainability reporting compared to the state from the very beginning of mandatory reporting. The analysis has included examining the types of information disclosed and the level of company-specific detail provided. The results showed significant improvements in non-financial disclosure comprehensiveness and quality, comparing disclosures for 2022 with the first obligatory reporting year, 2017. Moreover, significant improvements were found in most analysed disclosure categories observed separately. Furthermore, voluntarily reporting companies provided more comprehensive but not significantly higher quality non-financial disclosures than mandatory reporters. Finally, it was concluded that the industry area also significantly affects disclosure comprehensiveness but not the quality of entity-specific disclosures. The findings highlight progress driven by regulatory frameworks and stakeholder awareness, with areas needing further enhancement.
