Compliance with the Requirements of the Greek Legislation for Reporting on ESG Issues: The Case of the Paper Processing Sector

Abstract

We examined the extent to which companies in the paper processing sector, operating in printing, packaging, labeling, and paper bagging, comply with the requirements of Greek legislation for reporting information on ESG issues. The overall average compliance rating of the sector, which is 45.86% for the year 2021 and 46.20% for the year 2020, is below 50% (baseline), which means that the sector should improve in reporting on ESG issues. It should also be noted that there has been a deterioration in the average compliance rating between the two years. There is a very high statistically significant correlation between the compliance rating average and the average total assets (r2 = 0.897) and the average number of employees (r2 = 0.922), a high correlation, though not statistically significant, between the compliance rating average and the average results (r2 = 0.648), and a moderate statistically significant correlation between the compliance rating average and the average revenues (r2 = 0.570). There is an obvious positive relationship between holding ISO certificates and external auditor involvement and the average compliance rating of companies; these are both qualitative features favorable to effective governance. The companies that are active in paper bagging and cardboard box (food packaging) usage have also developed a greater environmentally friendly culture, which results in a higher average compliance rating in comparison with the other two activities of the sector. The companies in the region of Attica have a higher compliance rating than the companies in other regions because they operate in an environment that is much more polluted than the rest of Greece, due to its high concentration of people and companies; thus, they have become more sensitive to ESG issues. The companies that have been operating longer have also achieved a higher average compliance rating because younger companies are trying to gain market share and are not devoting their time and resources to ESG issues.