REGIONAL AND SECTORAL CONVERGENCE IN EU TAXONOMY DISCLOSURE QUALITY: EVIDENCE FROM NORDIC AND DACH FIRMS

Abstract

This study investigates the quality of disclosures according to the European Union (EU) Taxonomy in 171 public joint stock companies headquartered in the Nordic countries (Sweden, Norway, Finland) and the DACH region (Austria, Germany, Switzerland), based on 342 observations (data per company and year) from the reporting periods 2024 and 2025. The quality of disclosures is assessed through three dimensions – accessibility, detail and visual clarity – which are combined into a composite Disclosure Quality Index (DQI, Cronbach's alpha = 0.922) and supplemented by an assessment of external verification practices. Drawing on institutional and legitimacy theory, three hypotheses are tested using non-parametric statistical methods. The results show no statistically significant difference in the quality of disclosures between Nordic and DACH companies (Mann–Whitney U, p = 0.344), no significant association between belonging to the banking sector and the likelihood of conducting an external audit (chi-square, p = 0.977), and no significant difference in the level of detail of disclosures between manufacturing and financial/insurance companies (Mann–Whitney U, p = 0.373). The exploratory analysis covered all thirteen industry groups according to the NACE classification and also revealed no statistically significant differences (Kruskal–Wallis, p = 0.614). These findings suggest that the binding and harmonised regulatory framework of the EU Taxonomy leads to convergence of disclosure practices in regions and sectors that have historically differed in terms of voluntary reporting. The study contributes to the recent literature on compliance with the EU Taxonomy by directly assessing the quality of disclosures, rather than the mere existence of disclosures, and by examining whether institutional and sectoral differences persist after the introduction of a mandatory reporting regime.