Review Reports - Sustainable CSR: Legal and Managerial Demands of the New EU Legislation (CSRD) for the Future Corporate Governance Practices

Round 1

Reviewer 1 Report (Previous Reviewer 1)

Thank you for providing me with the opportunity to read your revised manuscript.

The authors have made a good attempt to address my comments, and revise the paper. However, by reading the manuscript and the modifications made, I can see clearly that most of the issues that I identified in the previous round are still unresolved.

In specific, the paper still lacks a clear contribution to the literature. I am still struggling to identify how the study has made specific development in the field. This is evident in the introduction and discussion sections (the places where typically researchers present and discuss their contribution) where nothing meaningful about the contribution is included there or any part of the paper. So the authors should focus on defining the gaps and study motivation. In other words, they should consider more the ‘problematization’ of their research gaps.

The literature review remains problematic. It is still descriptive (does not review and criticize the literature adequately), where the authors just added a couple of paragraphs and a contextual section. I am not sure that this addresses the problem I highlighted in the first round.

It is good that the authors have added a methodology section, but it is still limited as it does not show adequately how the data was analyzed and reported. Also, validity measures are not presented.

Finally, the findings section has been improved, but I am still not sure about the relevance of the reported findings because the reseach gaps and contributions are not reported adequately. For example, it is reported that “…Our research showed some discrepancies in the qualitative assessment of the non-financial statement. Considering the above, the presented research results showed that observed company did not disclose information on respect for human rights, and observed companies did not disclose information on anti-corruption and anti-bribery matters”, but how this can be connected to the study focus? Again, as the paper lacks a clear theoretical positioning, I was unable to interpret the findings. To fix this problem, the authors need to revise and define their reseach gaps,, objectives, and gaps clearly.

I wish you good luck with improving this paper!

Author Response

Dear Reviewer, Thank you for your valuable suggestions. As the attachment, please find the explanations of the additional work made in the article considering your opinions. We hope you will find our additional work on the presented paper valuable and therefore the paper also publishable. Thank you and best wishes, the Authors.

Author Response File: Author Response.pdf

Reviewer 2 Report (New Reviewer)

This research is interesting, focused on a relevant topic, and deserves adequate consideration.

However, I would like to suggest the following (minor) improvements.

1. research questions (at the moment merged with the introduction) should be part of the methodology section.

2. the methodology should be moved soon after the introduction, not at the end of the paper.

3. The research framework is confusing and it should be improved.

4. Research limitations and future work not identified

5. referencing is very limited, I encourage the authors to better engage with the existing literature

Author Response

Author Response File: Author Response.pdf

Reviewer 3 Report (New Reviewer)

Overall, the article discusses how Slovenian companies comply with the current legislation (NFRD) requirements and whether their non-financial reports are qualitatively and quantitatively adequate.

The article introduction is not well organized. It seems there is no connection between the paragraphs with different colors than previous paragraphs. Only two citations on the introduction.

- The language is good, but there are some typos that exist in the paper and should be amended.

- In the conclusion section, more elaboration in the empirical implication of this study is needed.

Author Response

Author Response File: Author Response.pdf

Reviewer 4 Report (New Reviewer)

The paper is good, but it needs improvements. These are my comments by sections:

1. Abstract: explain more clearly the gaps and authors' contributions. This section has a good description, but it needs more impact.

2. Introduction: authors need to improve this section profoundly. I can't find references or theoretical support. Try to write paragraphs with more analysis and coherence. For example, lines 48 and 55 begin with the exact text: "in this paper we." Maybe consolidate the paragraphs into one.

The paragraphs in this section are disarticulated and don't have a sequence. For example, the final paragraph could be better before or integrated with the line 77 paragraph.

3. The Theoretical basis has a good analysis; subsections 2.2, 2.3, and 2.4 need more references and support. They have different from subsection 2.1. Subsection 2.5 need to explain the intersection and contributions of the previous sections.

3. Research methodology: this section has a good beginning, lines 507 to 546, but figures and tables don't have clear descriptions and contributions.

4. Research results: this is a descriptive section. It needs previous sections' support, references, and alignment. This section needs more analysis, sequence, and explain the research contribution.

5. Conclusions: this section doesn't relate to the abstracts and introduction. Authors need to explain their contributions more. Review the results and describe more in this section. Focus on how this report could impact Slovenia, its strengths, and opportunities.

Author Response

Author Response File: Author Response.pdf

Round 2

Reviewer 1 Report (Previous Reviewer 1)

There is some effort to address my comments, however, the modifications made are minor and did not address my raised issues and concerns adequately. This is also evident in the response letter, where the authors did not explain how they addressed my concerns. Instead, it is only mentioned in that letter that "The opinion was considered – some additional work has been done to meet the above reviewer's suggestions".

Author Response

Dear Reviewer, Thank you for your valuable suggestions. As the attached file, please find the explanations of the additional work made in the article considering your opinions and suggestions. Also the revised version of the paper was turned into the system. We hope you will find the additional work suficient and therefore our revised paper suitable for publication. Thank you for your understanding and best wishes, the authors.

Author Response File: Author Response.pdf

Round 3

Reviewer 1 Report (Previous Reviewer 1)

In this revised version the authors made further effort to address the issues I raised in my previous two reports. However, the modifications made remain marginal and did not fix the problems and concerns that I identified since the first version.

Importantly, the paper still reads as a descriptive piece that descript the CSR reporting in a country. Why this context is important? Why we should explore it? What contingencies affect CSR reporting in this setting, and why do these contingencies exist? In short, the researchers need to focus on the ‘problematization’ of the research gap, and how your study would link to that gap (which I mentioned in my previous two review reports).

The literature review remains descriptive as it does not adequately review and criticize the literature. As such, the literature review section does not articulate the gaps and limitations of the literature.

Some tweaks have been done in the findings, but my concerns from the last round are still not addressed. These are “I am still unsure about the relevance of the reported findings because the reseach gaps and contributions are not reported adequately. For example, it is reported that “…Our research showed some discrepancies in the qualitative assessment of the non-financial statement. Considering the above, the presented research results showed that observed company did not disclose information on respect for human rights, and observed companies did not disclose information on anti-corruption and anti-bribery matters”, but how this can be connected to the study focus? Again, as the paper lacks a clear theoretical positioning, I was unable to interpret the findings. To fix this problem, the authors need to revise and define their reseach gaps,, objectives, and gaps clearly”

I wish you good luck with improving this paper!

Author Response

Dear Reviewer, Thank you for your valuable suggestions. In order to meet your suggestions we made some additional work in a part of conclusion. We hope you will find the additional work sufficient for publishing the paper. Thank you and best wishes, the authors.

Author Response File: Author Response.pdf

This manuscript is a resubmission of an earlier submission. The following is a list of the peer review reports and author responses from that submission.

Round 1

Reviewer 1 Report

Thank you for providing me with the opportunity to read your manuscript.

This paper seeks to analyze how Slovenian companies comply with the current legislation of the Non-Financial Reporting Directive (NFRD) requirements and whether their non-financial reports are qualitatively and quantitatively adequate. To this end, the study focuses on collecting and analysing data from 11 companies in Slovenia as an example of a transition economy. Overall, this is an important topic in the CSR compliance domain.

There are, however, some concerns and issues with this paper that should be addressed carefully.

First, the study lacks clear theoretical contribution. In specific, I struggled to identify how the current paper has advanced our understanding to the issues that affect the implementations and compliance with the NFRD requirements. I think this issue can be fixed if the identified gap and research questions in the introduction section are well justified. For example, the author(s) need to explain: why do we need a new study to examine the compliance of these companies? I think this question, that the authors mentioned “ will companies be better prepared for environmental and social risks and, therefore, better manage for sustainability once the CSRD is in place?” can offer a good start to identify and discuss the gap in the literature, and then present the theoretical contribution. In other words, I think addressing these questions will help in defining the study gaps, motivations, and theoretical contribution. In short, I recommend the authors to focus on the ‘problematization’ of the research gap.

Second, the literature review section is descriptive (i.e., does not critically justify the need for the study). In other words, you need to tease out the research gap from your review. What is the theoretical background of the study? Compliance with CSR or what? This is extremely important because it will help you to articulate your contribution. Moreover, and in connection with the first point, you need to identify your overall propositions so we can appreciate your critical inquiry. Relying only on data analysis won’t give you enough mileage to deliver adequate theoretical contribution.

Third, I was surprised that there is no methodology section. This section is important to evaluate the validity of the findings and judge how the data was collected and analysed. So you should develop this section.

Finally, the approach of reporting the findings is descriptive. There is no critical evaluation to the findings, and also the authors do not aim to connect the empirical findings obtained from the analysis (e.g., conduct a cross-case comparison). Just reporting what each company was/is doing is not really helpful to evaluate their practice. Also, the authors should revise how the findings are reported in the tables. At the moment, the adopted style is confusing and I was unable to understand the content of the tables.

Other issue:

· You should define all the acronyms when they are for the first time (e.g., NFRD)

· The paper needs proofreading

I wish you good luck with improving this paper!

Reviewer 2 Report

- - How are CSR and ESG related? Provide a discussion on this aspect, pointing-out the main points that connect and differentiate them, connecting it with the previous literature.

- - The findings gathered through companies’ reports should be rather placed in the Appendix. In the paper, discuss the impact of the findings and their policy implications. Furthermore, you should indicate those 11 companies and the industry they activate because CSR practices differ substantially across industries.

- - Rather than presenting the findings gathered from companies’ reports, would be more interesting to develop these findings into an index measuring the level of each company’s CSR, thus offering the possibility to rank and compare these companies. Moreover, one could compare the value of your CSR index to some providers that offer such indexes, such as Thomson Reuters or Bloomberg.

- - This paper will benefit from investigating what drives the CSR practices at the level of Slovenian companies, at least for 2020 or, more preferably, for a longer timespan in order to derive solid conclusions.

Reviewer 3 Report

The article “Sustainable CSR: Legal and Managerial Demands of the New EU Legislation (CSRD) for the Future Corporate Governance Practices” looks at the topic of corporate social responsibility by examining the degree to which 11 Slovenian businesses adhere to the NFRD criteria and the quality and sufficiency of their non-financial reporting. The study found that companies have not yet approached non-financial reporting in a qualitative manner. The most noticeable inadequacies in the companies' non-financial reporting can be observed in the implementation of gender and age diversity policy and in the disclosure of information on human rights, anti-corruption, and anti-bribery issues. The study also found that companies do not explain the the primary causes of such a condition. The lack of substantive reporting to explain why a certain policy does not exist is alarming. Some of the companies considered in the study did not explain their risk policies and did not refer to their non-financial statements in their annual reports, which reduces the transparency of the companies' non-financial projects and activities. The article concludes that, aside from disclosing more valuable non-financial information to stakeholders, the new CSRD will force companies to disclose data to increasingly difficult requirements established by other legal acts.

Abstract

The formulation of abstract should be also oriented to include the presentation of the main results of the present research.

Introduction

1. In the first section of the article, “1. Introduction”, the author presents the topics discussed in the paper at a general level, linking it with real and concrete facts and summarizes the following parts of the article. This section contains also a brief description of the methodology, the central research question and the main objectives. However, a short summary of the results misses so that it has to be included here.

2. I suggest to use the past tense not future tense because the research is already done.

3. A short outline of the outline of the rest of the paper should be presented in the last part of the introduction.

4. The objective of the present research should be better/more clearly highlighted. In the abstract the authors stated that “ the presented research, we analyze how Slovenian companies comply 20 with the current legislation (NFRD) requirements and whether their non-financial reports are qual-21 itatively and quantitatively adequate.”. However, from the Introduction the main obsjective of the research should be presented more clearly.

Literature review

The second part of the article, about the theoretical basis is divided into three parts: “2.1. Non-financial reporting and corporate social responsibility”, “2.2. Development of the EU legislation on the non-financial reporting”, and “2.3. Commission's proposal on new legislation”.

The literature review should also include the state of research for Slovenia regarding to the stage of adoption EU directives on the sustainable development.

The figure 1 taken with printscreen generally is against the copyrights. The authors have to remind a discussion on this figure, it is not necessary to copy and paste here. Or to draw it again using own data.

The followings more recent papers should be read and cited here.

· 10.1080/1331677X.2022.2080745

· 10.1016/j.gfj.2017.03.001

· 10.3390/su12114736

Methodology

The section of methodology misses. The authors has to create a separate section dedicated to describe the methodology.

Why do the authors include in the research only 11 companies? The sample is somehow small.

Results

The next section, named “3. The research, research findings, and presentation of the results” provides a brief description of the methodology followed by the presentation of the results. In order to obtain a higher level of clarity and fluency, it is strongly suggested to divide this section into two parts and present the sample, the period of analysis, and the methods used in the study separately from the results. Another suggestion for improving data presentation is to use graphics and diagrams in order to add a more dynamic and involving element. Apart from the fact that it would be recommended to split this part into two and add some graphs and diagrams in order to to make the information more dynamic, no other weaknesses are identified.

The tables from this section should be better arranged. I suggest to be put on Appendix. The results should be better explained.

Conclusions

The conclusions of the study and further discussion are presented in the fourth section. In this section, the main results of the study are summarized, offering some relevant interpretations and suggestions. There is a lack of personal interpretation and it would be advisable to include an explanation of the implications and contributions brought to the existing literature.

The author’s contributions are clearly and exhaustively presented in a separate section at the end of the paper. The references are coherent with the topic covered in the article and in sufficient quantity to ensure proper documentation.

Overall, this is a good piece of work. However, the lack of high deep methodology and the reduce sample (11 companies) are big weaknesses of this work It is only a qualitative piece of work.