From Compliance to Commitment: How Integrated Corporate Architecture Shapes Environmental SDGs Disclosure. An Explanatory Study of Italian Companies

Abstract

Adopting an institutional‐theory lens, this study explores Italian companies' progress in disclosing their contributions to the environmental Sustainable Development Goals (SDGs) in their non‐financial reports (NFRs). Using an Environmental SDGs Disclosure Index, the study examines whether an integrated corporate architecture shaped by common institutional pressures influences the extent of SDGs disclosure. The analysis focuses on Italian organizations operating in environmentally sensitive industries over the period 2018–2023. The findings reveal that the presence of a sustainability committee and the inclusion of a sustainability expert on that committee are positively associated with more extensive environmental SDGs disclosure. The results also indicate that disclosure is more extensive when environmental issues are integrated into corporate strategy and identified as material through the materiality assessment process. In addition, disclosure is more comprehensive when progress towards environmental goals is monitored through clearly defined short‐ and long‐term targets. This study contributes to the sustainability accounting literature by conceptualizing integrated corporate architecture as the coherent organizational configuration through which governance structures, strategic integration mechanisms, managerial processes, and accountability systems jointly enable firms to translate institutional sustainability pressures into substantive environmental SDGs disclosure. It also provides a framework for understanding the organizational mechanisms through which institutional pressures are internalized and translated into disclosure outcomes, thereby contributing to the broader debate on the implications of mandatory sustainability reporting requirements.