Purpose: Motivated by the new European Union Directive 2014/95 on non-financial and diversity information, this paper aims to develop a future research agenda to conduct pragmatic, theory-oriented research into the Directive and corporate sustainability reporting. Design/methodology/approach: Drawing upon the relational dynamics between states, firms and society in regulating non-financial reporting (NFR), this essay frames and analyses the Directive and its grand theories, as unproven theories, by discussing its practical concerns and reviewing the academic literature. Findings: The Directive is an act of policy to legitimise NFR that encompasses two grand theories: improve the comparability of information and enhance corporate accountability. From a pluralist perspective, companies can rest assure that their compliance with the Directive will be perceived as socially desirable, proper and appropriate. However, some of the forces involved in translating the Directive into actionable policies operate contra to the Directive’s goals and, instead, act as barriers to its grand theories. In addressing these barriers, a research agenda is proposed that both traces backward to re-examine the foundational theories of the past and looks forward to explore alternative possibilities for achieving these goals. Research limitations/implications: This paper provides researchers with a practical-driven and theory-oriented agenda for future research in light of the rising academic interest in the Directive. Practical implications: The barriers to the Directive’s grand theories help policymakers and practitioners to understand the practical concerns about the implementation of the Directive and other mandatory NFR policies. Originality/value: This paper enriches the emerging debate on the Directive and highlights future possibilities for fruitful empirical research by developing a research agenda.
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