INSTITUTIONALIZATION OF ENVIRONMENTAL, SOCIAL AND MANAGEMENT PRACTICES

Abstract

In the conditions of Ukraine's European integration aspirations and the strengthening of globalization processes, national companies must be aware of the risks associated with regulatory changes, take into account the institutional principles of ESG management, accumulate reporting data and make socially responsible and environmentally safe decisions. The article is devoted to the study of the institutional foundations of the implementation of environmental, social and managerial practices in the economic activity of economic entities. It was found that effective ESG management involves the reconciliation of ESG criteria and financial indicators and is a consistent process that includes the formation of an investment strategy taking into account risk and profit, the collection of non-financial information and the assessment of ESG criteria. It has been established that the implementation of the concept of sustainable development involves compliance with the principles of responsible investment, which contributes to the integration of ESG issues into investment analysis. It has been proven that an important component of ESG management is the disclosure of non-financial information and the formation of reports in accordance with current standards, which contributes to increasing the competitiveness of companies and ensures decision-making taking into account the long-term perspective. Тo ensure transparency and form a system of information support for decision-making regarding sustainable development and sustainable investment, companies, along with reporting on financial indicators, must accumulate data to understand the impact of economic activity on environmental and social issues, human rights issues, the fight against corruption and bribery. In other words, companies will report both how they are affected and how they are affected by various ESG factors. Compliance with the relevant requirements will require companies to form systems for monitoring and accounting for indicators of sustainable development, create policies for the presentation of relevant information, retain specialists or engage third-party organizations capable of conducting this type of research.