Environmental reporting and religiosity : An empirical analysis within the European financial sector

Purpose: This study investigates whether country-level religiosity influences environmental reporting within the financial sector. In particular, the study examines religiosity's influence on environmental reporting among banks, credit institutions, and investment firms (BCIs) across 11 European countries during the 2006-2022 period. Design/methodology/approach: The study used a dataset of 1,980 firm-year observations. Data from the World Value Survey was employed to assess religiosity at the country level. Responses to religiosity's affective, cognitive, and behavioural dimensions were analysed using principal component analysis (PCA) to derive a single score for each country. Religiosity's influence on environmental reporting was examined through an OLS regression model. Findings: The findings suggest a positive influence of country-level religiosity on environmental reporting among European BCIs. The results demonstrate that religious norms and the overall religious context within a country can

significantly influence corporate attitudes and practices regarding environmental reporting. Originality/value: This study enhances the understanding of religious norms' influence on corporate sustainability practices and introduces a new perspective within the financial sector by linking religiosity to environmental reporting practices. The findings align with theoretical frameworks of institutional and social norms theories, opening avenues for further research that could examine religiosity's influence on corporate sustainability. Moreover, it addresses the topic within the European context, reflecting recent developments' effects on nonfinancial reporting regulation and a certain degree of religious diversity, which may lead to different interpretations and expectations concerning environmental issues and reporting. [Publisher's text]