Early sustainability reporting emerged largely as a voluntary practice, driven by stakeholder and institutional pressures, legitimacy concerns, and economic considerations (Hahn and Kühnen 2013). A substantial body of literature examines the determinants of voluntary sustainability reporting and finds that firm size, industry affiliation, visibility, and stakeholder scrutiny are among the most consistent predictors of disclosure (Hahn and Kühnen 2013; Dienes et al. 2016; Arkoh et al. 2024). Firms operating in environmentally sensitive industries are more likely to engage in sustainability reporting, reflecting higher exposure to environmental risks and reputational concerns (Velte 2023).

However, prior research consistently documents important limitations of voluntary reporting. Disclosures tend to be selective, qualitative, and focused on positive aspects of corporate performance, while negative impacts and controversial issues are often omitted or downplayed (Hahn and Kühnen 2013; Dienes et al. 2016). This has raised concerns about symbolic reporting and greenwashing, particularly when firms face weak regulatory oversight or when reporting frameworks provide broad discretion (e.g., Luu et al. 2025; Mateo-Márquez et al. 2022). As a result, voluntary sustainability reporting often fails to provide comparable, decision-useful information to stakeholders (Christensen et al. 2021).

In response to the shortcomings of voluntary disclosure, regulators increasingly rely on mandatory sustainability reporting regimes. There is evidence that mandatory sustainability reporting can lead to improvements in environmental and social outcomes. For example, mandatory disclosure has been associated with reductions in greenhouse gas emissions, improved workplace safety, and increased investment in sustainable practices (Delmas et al. 2010; Bennear and Olmstead 2008; Chen et al. 2018; Downar et al. 2021). Related research also shows spillover effects along supply chains and across borders, suggesting that disclosure mandates can influence behavior beyond directly regulated firms (She 2022; Kim et al. 2025). In addition, mandatory sustainability reporting is found to be value relevant. Importantly, firms with stronger sustainability performance and more credible disclosures tend to benefit from mandatory regimes, whereas firms with poor performance or low transparency may face negative market reactions (Baboukardos 2017; Grewal et al. 2019; Jouvenot and Krueger 2019; Mittelbach-‑Hörmanseder et al. 2021; Vishnu Nampoothiri et al. 2024).

Previous studies also examine how mandatory rules affect the quantity and quality of sustainability disclosures. Empirical evidence from various European countries shows that mandatory sustainability reporting leads to a significant increase in the volume of disclosed information (Larrinaga et al. 2002; Chauvey et al. 2015; Venturelli et al. 2019; Korca et al. 2021). However, improvements in disclosure quality are often limited. Firms frequently do not fully comply with regulatory requirements, rely on boilerplate language, and avoid disclosing negative or sensitive information (Fallan and Fallan 2009; Chauvey et al. 2015). Recent work further suggests that enforcement plays a critical role in determining whether mandatory reporting leads to meaningful transparency (Haase and Hitz 2025; Donau and Müller 2025). Without strong enforcement and clear guidance, mandatory sustainability reporting risks replicating the limitations of voluntary disclosure, albeit on a larger scale.

Numerous scientific studies increasingly document the persistence, toxicity, and widespread environmental contamination associated with PFAS, as well as substantial long-term economic and health costs (Evich et al. 2022; Sonne et al. 2023; Ackerman Grunfeld et al. 2024; Zahm et al. 2024). Despite their growing relevance, PFAS are not explicitly referenced in major sustainability reporting standards such as the GRI and the ESRS (GRI 2021; EFRAG 2023). Instead, PFAS fall implicitly under broader categories such as substances of very high concern, which form part of ESRS E2 pollution. Prior research suggests that such implicit treatment reduces disclosure, particularly for complex, technical, and legally sensitive topics (Abraham and Shrives 2014; Melloni et al. 2016). As a result, firms may formally comply with mandatory reporting requirements while omitting important, or even material information on emerging threats.

To date, no empirical studies have examined corporate PFAS reporting. This absence is striking given the increasing regulatory attention at both EU and national levels. By examining PFAS disclosures of Dutch listed companies over time, this study addresses a clear gap in the sustainability reporting literature. It contributes to ongoing debates on voluntary versus mandatory reporting by showing how principle-based mandatory regimes may fail to capture emerging environmental risks when explicit guidance is lacking. In doing so, the study extends prior research on the limits of sustainability disclosure regulation and highlights PFAS as a critical test case for the effectiveness of the CSRD and ESRS.

Being an EU-member state, The Netherlands has mandatory reporting rules, stemming from EU-directives. As EU directives are legal acts stating a goal, without dictating how those goals must be met, it requires member states to implement and enforce the directive in their national laws. In recent years, two sustainability reporting directives have been implemented in Dutch Law: the Non-Financial Reporting Directive (NFRD) and the Corporate Sustainability Reporting Directive (CSRD).

PFAS are not mentioned in any of the relevant sustainability reporting directives (NFRD and CSRD), nor in the related Dutch laws. For concrete guidance in relation to its principle-based approach, the NFRD refers to reporting frameworks, such as the GRI. However, the GRI does not list PFAS or broader Substances of Very High Concern (SVHC) by name in the core disclosures either (GRI 2021). GRI and NFRD both stress the importance of materiality, implying that PFAS should be reported when they have material significance for their operations, risk profile, or stakeholder expectations. As for the CSRD, the main points of what must be reported are set out in the directive, whereas the details are set out in the European Sustainability Reporting Standards (ESRS). PFAS are not mentioned under the (sub-)topics of the ESRS; however, PFAS are increasingly considered to be Substances of Very High Concern (SVHC).¹ These are listed under ESRS E2 Pollution (see Table 1).

Materiality is also crucial for the CSRD. If PFAS is a material environmental topic, a company would have to report several things under ESRS E2 Pollution (Brans et al. 2024; EFRAG 2025):

1. Disclosure of policies aimed at phasing-out, and substituting PFAS, and compliance with Dutch law.
2. Disclosure on the actions it takes in terms of e.g., supplier engagement, testing, and R&D.
3. Reduction targets with accompanying dates, next to the actual quantities of PFAS that are used or emitted or present in products and waste.
4. The company must give insight into risks and opportunities related to PFAS, including topics such as regulatory fines, liability, brand risk, and market opportunities for PFAS-free products.
5. Disclosure on board oversight and management responsibilities for PFAS, as well as skills and incentives related to managing PFAS are mandatory.

Yet, even if PFAS are not material, the company must disclose on its materiality assessment (ESRS 2 IRO-1), including the topics that were considered and assessed as non-material and on what basis (e.g., no PFAS use, no relevant emissions, no financial exposure, etc.). Moreover, if PFAS are considered a potential risk, cost or impact in the future they must be mentioned even if not material. Transparency on the materiality assessment and risk is even more relevant in countries like the Netherlands – where PFAS is increasingly regulated – and certain sectors for which PFAS are more relevant, due to activities such as real estate/construction, textiles, semiconductors, chemical manufacturing, and food packaging (Glüge et al. 2020). Next to pollution (ESRS E2), PFAS may also be relevant in terms of water contamination, hazardous waste, worker and community exposure and litigation or cleanup liabilities. Hence, when PFAS is material, reporting on PFAS may also occur under other ESRS standards, such as: E3 (Water & marine), E5 (Resource use & circularity), S1 (Own workforce), S2 (workers in value chain), S3 (affected communities).

For this study, the annual reports of 75 companies – 25 listed on the AEX, 25 on the AMX, and 25 on the AScX – were examined for the period 2019–2024. These three indices were selected to ensure balanced representation across large-cap, mid-cap, and small-cap firms in the Dutch market. An overview of the companies included in the analysis is presented in Appendix 2. In total, 432 annual reports were analyzed; any additional reports, such as standalone sustainability reports, were not included.

The 432 annual reports were examined for PFAS disclosures along three dimensions: (1) the presence of a PFAS disclosure, (2) the depth of the disclosure, and (3) its qualitative characteristics. First, we assessed whether each annual report mentioned PFAS at least once. Second, for the reports in which PFAS was mentioned, the depth was evaluated by counting the number of PFAS references within the document. Finally, the qualitative characteristics of the PFAS disclosures were analyzed using criteria derived from the assessment sheet developed on the basis of NFRD and CSRD guidelines, covering the following categories:

Accordingly, for all reports that contained a PFAS reference, we classified the disclosure into one of the categories outlined above.² In addition, we examined whether the PFAS disclosure appeared in an audited section of the annual report and, if so, what type of assurance was applied (limited or reasonable).

Our results indicate that, out of the 432 annual reports analyzed, 34 mention PFAS at least once, meaning that approximately 8% of the reports include PFAS-related disclosures. Translating these findings to the firm level, we find that the 34 reports originate from 14 unique companies. Consequently, approximately 19% of Dutch listed firms mentioned PFAS at least once in their annual reports during the period 2019–2024.³ An overview of the companies reporting PFAS disclosures, the corresponding number of annual reports containing such disclosures, and selected firm characteristics is presented in Table 2⁴.

Table 2 documents a relatively uneven disclosure pattern, with a small number of firms accounting for a large share of PFAS-related disclosures. Arcadis (6) and BAM Group (5) emerge as the front-runners, together accounting for over 30% of all PFAS-related reports, ASM (4) and ASR (4) contribute a further 24%, while Heijmans (3) and ASML (3) together account for an additional 18%. This concentration indicates sustained and repeated disclosure practices among only a limited group of firms.

Unsurprisingly, we find that PFAS disclosures are concentrated in industrial and infrastructure-related industries, in particular sectors such as industrial services and manufacturing (engineering, construction, infrastructure consulting), semiconductor manufacturing, and chemicals and materials manufacturing. Firms in the industrial services and manufacturing sectors together constitute 50% of all PFAS-related disclosures, highlighting the prominence of these industries in PFAS reporting. Companies operating in the electronic components and manufacturing sector account for a further 21% of disclosures. Firms such as Arcadis, BAM Group, Heijmans, ASM, and ASML operate in sectors where PFAS exposure may arise through construction materials, environmental remediation, and high-tech manufacturing processes.

With regard to firm size, measured by the number of employees, substantial heterogeneity is observed among PFAS-reporting firms. Headcount ranges from as few as 122 employees at WDP to as many as 387,000 at Ahold Delhaize. It seems that there is no one-to-one relationship between firm size and disclosure frequency, as might initially be expected. The fact that Avantium (284 employees) and WDP (122 employees) are among the PFAS disclosers – while they are ‘Wave 2’ companies, currently not included under NFRD or CSRD – adds to this observation. While very large firms such as Ahold Delhaize and ArcelorMittal report PFAS disclosures only once, smaller or mid-sized firms such as Arcadis and BAM Group disclose PFAS information repeatedly. This suggests that operational exposure and business activities, rather than headcount alone, drive PFAS reporting intensity. Overall, the table indicates that PFAS disclosure is most prevalent among firms with direct involvement in infrastructure, industrial services, and advanced manufacturing, and that repeated disclosures are concentrated among companies with sustained environmental or regulatory exposure. Listing on a major stock exchange and firm size appear to influence disclosure, but industry characteristics seem to be the dominant factor.

Assessing the depth of PFAS disclosure, our findings show that the 34 reports with at least one PFAS reference result collectively in a total of 137 PFAS mentions. A detailed review of the disclosures reveals that 20 PFAS references (15% of the total references) are included solely in the glossary and definitions section, with no mention in the main body of the annual report. Consequently, these references are excluded from subsequent analyses.

Among the remaining 117 PFAS references, the extent of disclosure per report varies considerably, spanning from only one reference to as many as 19 within a single annual report. On average, each annual report contains 3.4 PFAS references. Table 3 provides an overview of the depth of PFAS disclosures, including the number of PFAS references per annual report, and the respective companies and years.

In our assessment, Heijmans and Arcadis stand out as the front-runners with the most extensive PFAS disclosures. Collectively, these two companies account for 62% of the total PFAS references. The annual reports of Heijmans collectively contain 35 PFAS references, while Arcadis’ reports contain 37. The 2019 annual reports alone account for 19 and 14 PFAS references for Heijmans and Arcadis, respectively. The BAM Group’s reports account for 11% of the total PFAS references, with the 2019 and 2020 reports containing 6 and 5 references, respectively.

After analyzing the depth of the disclosures, we examine their qualitative characteristics based on the NFRD and CSRD guidelines. The first analytical dimension concerns the materiality assessment, capturing whether PFAS is identified as a material topic by the board of directors. Interestingly, despite the growing regulatory, litigation, and reputational landscape, only one report (0.002% of total reports) in our sample explicitly identified PFAS as a material topic. In its discussion of the materiality assessment and the resulting material themes, BAM Group’s 2020 annual report identifies nitrogen and PFAS issues in the Netherlands as material topics, noting that global events – including PFAS, Brexit, and COVID-19 – had a relatively high impact on the company’s performance and its stakeholders in 2020. Notably, this materiality label for PFAS disappeared in subsequent years.

Next, we examine whether PFAS disclosures reflect policy commitments, such as phase-out strategies, substitution efforts, or compliance with REACH and EPA requirements. Table 4 presents the companies that disclose PFAS-related commitments in their annual reports, along with the corresponding number of reports, stock exchange listings, and reporting years.

Our results indicate that 4 out of the 14 companies disclose PFAS-related information and also articulate concrete PFAS-related commitments and policies. This suggests that approximately 29% of the firms in our sample go beyond symbolic references to PFAS and appear to integrate PFAS considerations into their operations. Remarkably however, disclosure takes place in only one year, with no continuation in subsequent years, raising questions on the consistency of the information. While small- and mid-cap firms are relatively well represented among companies disclosing PFAS-related information (see Table 2), PFAS-related commitments and policies are disclosed exclusively by AEX-listed firms. This finding further underscores the complexity and the heightened scrutiny to which these larger firms are subject. An example of a PFAS-related policy and commitment disclosure is present in Box 2.

Following this, we assess the next dimension under the NFRD and CSRD guidelines: PFAS-related actions disclosed by the firms, including activities such as supplier engagement, testing procedures, and R&D initiatives. Our results (Table 5) show that 8 of the 14 PFAS-reporting companies (57%), via 12 out 48 reports (25%) mention PFAS actions to address PFAS-related issues. Again, disclosure seems inconsistent since all companies – except Arcadis – report during one year only. It is also noteworthy that while AEX-listed firms continue to dominate (63%) PFAS-related actions, the other two stock exchanges account for 37%. An example of a PFAS-related actions disclosure is presented in Box 3.

The next two dimensions we analyze concern PFAS-related targets and metrics. Targets include, for example, percentage reduction objectives and elimination timelines, while metrics cover quantities of PFAS used or emitted, concentration levels in products or waste, and remediation measures. Our results indicate that none of the firms in our sample report concrete PFAS-related metrics. However, in the targets category, we find that one company – Heijmans – incorporates PFAS into its target and goal setting in the 2020 and 2021 annual reports, after which years the information again disappeared from its reports. This is illustrated in Box 4.

Not surprisingly, our findings show that the most PFAS-oriented disclosures pertain to the dimension of risks and opportunities, encompassing regulatory fines, liabilities, brand and reputation risks, as well as market opportunities for PFAS-free products. Our results show that 11 of the 14 PFAS-reporting companies mention such risks or opportunities in their annual reports, indicating that approximately 79% of the sample views PFAS and related regulations or trends as either a risk or an opportunity for their business models and operations. Furthermore, several firms report these risks and opportunities across multiple annual reports, resulting in a total of 28 reports. This means that, of the 34 reports containing PFAS disclosures, 82% addresses risks and opportunities. Table 6 presents the companies that present PFAS disclosures as either risks or opportunities in their annual reports, along with the corresponding number of reports, stock exchange listings, and reporting years.

The results in Table 6 show that the top-3 companies together account for more than 50% of the total risk- and opportunities-related PFAS disclosures. This is consistent with the findings in Table 2, which show that firms operating in industries such as engineering, construction, and infrastructure – where PFAS contamination, remediation, and regulatory compliance are directly relevant to core business activities – are more likely to be affected by emerging PFAS trends and regulatory changes. This makes firms such as Arcadis, BAM, and Heijmans more likely to report PFAS-related risks and opportunities in a more systematic manner, as evidenced by their number of reports in which such disclosures appear. However, only Arcadis discloses the information consistently in all years investigated. Moreover, while AEX-listed firms are visible in this dimension, the prominence of AMX- and AScX-listed firms in this category reinforces the fact that exposure to PFAS-related operational risks, rather than firm size alone, drives the discussion of PFAS-related risks and opportunities. An example of a PFAS-related risk disclosure is presented in Box 5 and an example of a PFAS-related opportunity in Box 6.

The final dimension of our analysis focuses on governance. This category encompasses disclosures related to board oversight and management responsibilities concerning PFAS, as well as information on relevant skills, expertise, and incentive structures. Examples include the integration of PFAS-related targets into remuneration plans and other governance mechanisms designed to support effective management of PFAS-related risks and impacts. Our results indicate that only one company in our sample – Heijmans – reported governance-related PFAS disclosures, as reflected in its 2019 and 2020 annual reports. This finding may be partially explained by the results in the targets category, where Heijmans was the only company to incorporate PFAS into its target and goal-setting activities (see Box 4). An example of a governance-related PFAS disclosure is presented in Box 7.

As a final step in our analysis, we examine whether the PFAS disclosure appears in an audited section of the annual report and, if so, what type of assurance was applied (limited or reasonable). We find that a substantial proportion of the reports disclosing PFAS-related information are audited by an external auditor. Specifically, approximately 56% of PFAS-related disclosures appear in sections of the annual reports that are subject to external audit (19 out of total 34 reports, 8 companies). With respect to the level of assurance provided, our findings reveal that 21% of the audited PFAS disclosures receive actually a reasonable level of assurance. The PFAS disclosures in the annual reports of the BAM Group for the years 2020 and 2021, as well as those of ForFarmers for 2019 and 2020, were audited at a reasonable level of assurance. As expected, most PFAS disclosures (79%) were subject to a limited level of assurance.

For regulators, we propose three complementary avenues on how PFAS-related disclosure guidance could be improved within the existing principle-based architecture of the ESRS framework.

1. Regulators and standard setters could provide interpretative guidance clarifying how PFAS-related risks and impacts should be considered within existing ESRS standards, particularly ESRS E2 (Pollution), including examples of relevant policies, actions, targets, and metrics.
2. Sector-specific guidance could be developed for industries with higher PFAS exposure (e.g., chemicals, semiconductors, infrastructure, and construction), where operational exposure and regulatory risk are more likely to be material.
3. Illustrative implementation examples or best-practice disclosures could help companies operationalize PFAS reporting while maintaining the flexibility inherent in principle-based standards.

Our recommendations should, however, be interpreted with caution given the limited insights and evidence provided by our sample to avoid overstating any conclusions.