SUSTAINABLE MANAGEMENT TOOLS IN THE FACE OF HEIGHTENED BUSINESS ENVIRONMENT RISKS (ON ESG METHODOLOGY)

Abstract

The ESG concept increasingly affects the transformation of the global business environment, driving new approaches to management, reporting, and accountability. Since the 2004 World Bank report “Who Cares Wins”, the integration of ESG factors has become a core element of investment strategies, with approximately 90% of S&P 500 companies adopting ESG policies. The complexities of synchronizing national legislation with EU directives add an additional layer of difficulty, highlighting the need for tailored strategies that accommodate local contexts while adhering to international benchmarks. Prominent controversies surrounding ESG implementation focus on the effectiveness of existing methodologies for evaluating ESG performance, particularly in regions affected by conflict. Critics argue that conventional ESG scoring systems may not adequately capture the unique challenges faced by Ukrainian businesses, leading to potential disparities in investment opportunities and international relations. In Ukraine, ESG adoption is shaped by geopolitical challenges and war, which emphasized energy diversification, waste management, and corporate resilience. The European Union provides regulatory benchmarks through the Corporate Sustainability Reporting Directive (CSRD) and the Sustainable Finance Disclosure Regulation (SFDR), creating a legal framework for transparency and accountability. The purpose of this study is to analyze management tools for ESG implementation, focusing on data governance, monitoring, auditing, and strategy integration. Findings indicate that embedding ESG criteria into corporate governance enhances competitiveness, mitigates regulatory and reputational risks, and supports Ukraine’s sustainable recovery. Effective implementation of Environmental, Social, and Governance (ESG) principles is essential for modern businesses aiming to enhance their competitiveness while contributing positively to society and the environment. A strategic approach to ESG integration can improve a company's reputation and mitigate risks associated with non-compliance with emerging regulations Moreover, the analysis confirms that an adaptive, systematic approach aligned with EU regulations is essential for long-term stability, international investment attractiveness, and the advancement of sustainability-driven practices in Ukrainian enterprises.