IMPLEMENTATION OF ESG CONCEPTS: A STRATEGIC IMPERATIVE FOR THE SUSTAINABLE GROWTH OF SMALL AND MEDIUM-SIZED AGRICULTURAL ENTERPRISES IN UKRAINE
Abstract
The article substantiates the implementation of ESG concepts as a strategic imperative for the sustainable growth of small and medium-sized agricultural enterprises (hereinafter SMEs) in Ukraine amid the profound transformation of the agricultural sector driven by a combination of global challenges (climate change, soil degradation, social inequality) and local shocks (full-scale war, infrastructure destruction, labour shortages). Theoretical approaches to the interpretation of sustainable development, corporate social responsibility (CSR) and ESG are systematized. Based on a synthesis of domestic and international studies, the current state and key barriers to ESG integration are identified: the fragmented nature of implemented practices, the absence of mandatory non-financial reporting requirements, a shortage of financial and human resources, a low level of digitalization and limited management awareness of ESG reporting standards. A methodological approach is proposed for the quantitative assessment of the ESG level of agricultural SMEs using an integral index that combines a system of environmental, social and governance indicators with sector-specific weighting coefficients reflecting the resource, social–labour and institutional specifics of agribusiness. Testing the model on the example of the agricultural cooperative “Progres” confirmed a sufficient level of the enterprise’s ESG maturity and demonstrated the relationship between the integral ESG index, opportunities to attract concessional finance, participation in sustainable development support programmes and integration into sustainable supply chains. Drawing on the modelling results and an analysis of the practices of leading Ukrainian and international agri-food companies, a step-by-step strategy for implementing ESG approaches in agricultural SMEs is developed, which includes ESG self-assessment, identification of priority areas, implementation of pilot projects, integration of ESG into key business processes and the preparation of simplified non-financial reporting based on “light” SME standards. It is shown that the implementation of the proposed strategy can enhance the competitiveness of small and medium-sized agricultural enterprises, expand their access to green finance and strengthen their contribution to the achievement of the Sustainable Development Goals.
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