EU Taxonomy between strategic impetus and regulatory uncertainty: evidence from Gruppo Hera

This thesis investigates the impact of the European Union’s Taxonomy Regulation on sustainability performance, corporate strategies and reporting practices, using the Italian multi-utility Gruppo Hera as an empirical case study. Grounded in institutional, legitimacy, and signaling theories, and explicitly addressing the issue of regulatory uncertainty discussed in the theoretical framework, the study formulates two main hypotheses to explore the effects of compliance with Environmental, Social and Governance (ESG) regulations, both in the short and long term. The detailed and critical literature review conducted has allowed for the identification of two expected scenarios. In the long term, the adoption of the Taxonomy encourages companies to improve their sustainability performance, thanks to a regulatory framework that grants them strategic legitimacy in the eyes of stakeholders, generating tangible benefits in terms of results and corporate reputation. However, in the immediate term, the regulatory complexity and rapid evolution of technical standards, such as those introduced under the Corporate Sustainability Reporting Directive (CSRD), could fuel uncertainty, prompting companies to focus primarily on mere formal compliance, thus slowing down the effective integration of sustainability into corporate strategies and the achievement of expected performance results. Although these two effects may appear to follow parallel trajectories, in the context analyzed by the thesis, it will emerge how they intersect and coexist with each other. To test these two hypotheses that emerged from the Structured Literature Review (SLR) conducted, the thesis adopts a multi-method approach, combining quantitative analysis of Taxonomy-related KPIs with qualitative content analysis of corporate disclosure reports. Furthermore, to ensure robustness and comprehensiveness of the analysis, findings are ultimately triangulated with insights gathered during professional experience at KPMG. By bridging theoretical insights with empirical evidence through a rigorous and multi-faced approach, this thesis aims to fill the existing research gaps by extending the time horizon of the analysis. This allows for the incorporation of more defined taxonomic financial metrics and the consideration of the CSRD, as requested by the literature. The contribution offered consists of a greater understanding of the potential of the European Taxonomy under certain conditions, providing useful guidance for policymakers, industry professionals and the academic community, while stimulating critical reflection on future challenges.