Energy companies’ transparency: Toward competitiveness and SDG 7 progress
-
Author(s)Inna MakarenkoLink to ORCID Index: https://orcid.org/0000-0001-7326-5374
,
Pavlo BrinLink to ORCID Index: https://orcid.org/0000-0001-7374-3727
,
Anargul BelgibayevaLink to ORCID Index: https://orcid.org/0000-0001-5583-0624
,
Igor OrlovLink to ORCID Index: https://orcid.org/0000-0003-3119-0698
,
Zhanna OleksichLink to ORCID Index: https://orcid.org/0000-0002-4486-974X
-
DOIhttp://dx.doi.org/10.21511/ppm.21(2).2023.55
-
Article InfoVolume 21 2023, Issue #2, pp. 603-617
- Cited by
- 613 Views
-
213 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
The disclosure of information on sustainability by energy companies is a guarantee of increasing their competitiveness in achieving Sustainable Development Goal 7 and the post-war recovery of the Ukrainian energy sector. This paper aims to evaluate the sustainability transparency reporting of energy companies in Ukraine and connect the level of such transparency and their competitiveness. The study used the Transparency Index to analyze information disclosure on sustainability by 50 energy companies in Ukraine, the largest taxpayers. It is based on SDG, CSR, and ESG criteria and shows the companies’ ratings. It was found that companies with a low disclosure of SDG, CSR, and ESG criteria have the largest specific weight (76%) among the respondents. The undisputed leader in sustainability transparency is Energoatom, while only 11 companies out of 50 surveyed have an A and B rating (the highest and higher level of transparency). The index was used as a factor variable in the non-parametric modeling of the relationship between the sustainability transparency of energy companies in Ukraine and their competitiveness (company return, profitability, and profit margin of taxes paid). A close, statistically significant, and inverse relationship was revealed between the Sustainability Transparency Index of energy companies and indicators illustrating their competitiveness besides profitability. The results of rating and clustering companies according to SDG, CSR, and ESG criteria can be used to improve their positive and negative investment screening procedures and increase their competitiveness on the way to SDG 7.
Acknowledgment
Inna Makarenko gratefully acknowledges support from the Supreme Council of Ukraine (0122U201796).
- Keywords
-
JEL Classification (Paper profile tab)M40, M41
-
References66
-
Tables6
-
Figures3
-
- Figure 1. Study methodology of the sustainability transparency reporting of energy companies
- Figure 2. Distribution of energy companies by type of sustainability reporting, 2021
- Figure 3. Distribution of energy companies by frequency of SDGs mentioned in reporting, 2021
-
- Table 1. Comparison of methodological approaches for assessing sustainability criteria disclosure by energy sector companies
- Table 2. The interest of stakeholder groups in the competitiveness and tax payments of energy companies (loyalty) indicators
- Table 3. Grouping of Ukrainian energy companies according to the Sustainability Transparency Index
- Table 4. Shapiro-Wilk test for testing pairs of factor and outcome variables for the studied energy companies for the normality of distribution
- Table 5. Spearman’s and Kendall’s rank correlation coefficients for the Sustainability Transparency Index of energy companies’ reporting and their competitiveness indicators
- Table A1. Results of STI evaluation for the Ukrainian energy companies
-
- Afgan, N. H., Carvalho, M. G., & Hovanov, N. V. (2000). Energy system assessment with sustainability indicators. Energy Policy, 28(9), 603-612.
- Alabdullah, T. T. Y., & Asmar, M. (2022). Under COVID-19 pandemic impact: Do internal mechanisms play fundamental role in corporations’ outcomes. Business Ethics and Leadership, 6(1), 83-91.
- Alharbi, A. M., & Al-Adeem, K. R. (2022). A defense on accounting discretion: An empirical inquiry based on users’ awareness. Financial Markets, Institutions and Risks, 6(3), 26-39.
- Aliamutu, K. F., Bhana, A., & Suknunan, S. (2023). The impact of environmental costs on financial performance: An explorative analysis of two plastic companies. Environmental Economics, 14(1), 13-23.
- Atilgan, B., & Azapagic, A. (2016). An integrated life cycle sustainability assessment of electricity generation in Turkey. Energy Policy, 93, 168-186.
- Behl, A., Kumari, P. S. R., Makhija, H., & Sharma, D. (2021). Exploring the relationship of ESG score and firm value using cross-lagged panel analyses: Case of the Indian energy sector. Annals of Operations Research.
- Boros, A., Lentner, C., Nagy, V., & Tőzsér, D. (2023). Perspectives by green financial instruments – A case study in the Hungarian banking sector during COVID-19. Banks and Bank Systems, 18(1), 116-126.
- Brin, P., & Nehme, M. (2021). Sustainable development in emerging economy: Using the analytical hierarchy process for corporate social responsibility decision making. Journal of Information Technology Management, 13(S), 159-174.
- Brin, P., Lombardi, R., Nehme, M. N., & Tiscini, R. (2022). Corporate social responsibility, competitiveness and sustainability in emerging economies: The case of Ukraine. International Journal of Management and Decision Making, 21(4), 379-401.
- Caglar, A. E., & Askin, B. E. (2023). A path towards green revolution: How do competitive industrial performance and renewable energy consumption influence environmental quality indicators? Renewable Energy, 205, 273-280.
- Cavagnetto, S., Makarenko, I., Brož, V., Rivera, L., & Filatova, H. (2022). The sustainability transparency index of sovereign wealth funds: Their asset size, SDG country rankings and cross-region comparison. Investment Management and Financial Innovations, 19(4), 218-231.
- Chen, Y. H., Wen, X. W., & Luo, M. Z. (2016). Corporate social responsibility spillover and competition effects on food industry. Australian Economic Papers, 55(1), 1-13.
- Corporate Governance Professional Association (CGPA) & CSR Ukraine. (2021). ESG Transparency Index 2020. (In Ukrainian).
- DixiGroup. (2022). Indeks prozorosti enerhetyky Ukrainy. Voiennyi vypusk [Energy transparency index of Ukraine. Military issue]. (In Ukrainian).
- Djalilov, K. (2022). A contingent resource-based perspective on corporate social responsibility and competitive advantage: A focus on transition countries. Business Ethics and Leadership, 6(1), 92-108.
- Dorini, G., Kapelan, Z., & Azapagic, A. (2011). Managing uncertainty in multiple-criteria decision making related to sustainability assessment. Clean Technologies and Environmental Policy, 13, 133-139.
- Filatova, H., Vasylieva, T., Vynnychenko, N., Ballova, M., & Gedeon, M. (2022). Accounting support for sustainability reporting: Theoretical foundations and bibliometric analysis. Accounting and Financial Control, 4(1), 1-13.
- Friedman, M. (1962). Capitalism and freedom. University of Chicago Press.
- Hannan, M. A., Al-Shetwi, A. Q., Ker, P. J., Begum, R. A., Mansor, M., Rahman, S. A., Dong, Z. Y., Tiong, S. K., Indra Mahlia, T. M., & Muttaqi, K. M. (2021). Impact of renewable energy utilization and artificial intelligence in achieving sustainable development goals. Energy Reports, 7, 5359-5373.
- Harini, S., Pranitasari, D., Said, M., & Endri, E. (2023). Determinants of SME performance: Evidence from Indonesia. Problems and Perspectives in Management, 21(1), 471-481.
- Ibrahimov, Z., Hajieva, S., Nazarov, V., Mazanov, A., & Baghirov, J. (2022). Quality and innovations in the financial reporting as a way to increase attractiveness for institutional investors. Marketing and Management of Innovations, 2, 244-254.
- Ievdokymov, V., Oliinyk, O., Ksendzuk, V., & Sergiienko, L. (2018). Circular economy as an alternative environment-oriented economic concept for Ukraine. Ekonomista, 2018(3), 347-362.
- Jati, K. W., Agustina, L., Deviani, Ulupui, I G. K. A., & Respati, D. K. (2023). The effect of environmental performance on sustainability reporting: A case of Indonesia. Environmental Economics, 14(1), 36-46.
- Jha, M. K., & Rangarajan, K. (2020). Analysis of corporate sustainability performance and corporate financial performance causal linkage in the Indian context. Asian Journal of Sustainability and Social Responsibility, 5(1), 1-30.
- Kaya, H. D. (2022). The global crisis, manufacturing firms, regulations and taxes. SocioEconomic Challenges, 6(4), 1-7.
- Khalatur, S., & Dubovych, O. (2022). Financial engineering of green finance as an element of environmental innovation management. Marketing and Management of Innovations, 1, 232-246.
- Kim, L., Chouykaew, T., Pongsakornrungsilp, S., Jindabot, T., & Lee, S. (2023). How to promote repurchase intention toward Covid-19 antigen test kits: Evidence from Thai consumers. Innovative Marketing, 19(1), 186-196.
- Kowalski, K., Stagl, S., Madlener, R., & Omann, I. (2009). Sustainable energy futures: Methodological challenges in combining scenarios and participatory multi-criteria analysis. European Journal of Operational Research, 197(3), 1063-1074.
- Kozmenko, S., & Korneev, M. (2014). Periodization of financialization process of economics: Domestic and foreign contexts. Economic Annals-XXI, 9-10(1), 73-76.
- Kryshtanovych, M., Dragan, I., Grytsyshen, D., Sergiienko, L., & Baranovska, T. (2022). The public and environmental aspect of restoring sustainable regional development in the face of the negative impact of military actions on the territory of the country. International Journal of Sustainable Development and Planning, 17(5), 1645-1651.
- Kryzhnyi, A. (2023, April 29). Building a new country: How Ukraine will replace old and destroyed power plants [Buduiemo novu krainu: Yak Ukraina zaminiatyme stari y zruinovani elektrostantsii]. Unian. (In Ukrainian).
- Kumar, M. (2020). Social, economic, and environmental impacts of renewable energy resources. In K. E. Okedu, A. Tahour, & A. G. Aissaou (Eds.), Wind solar hybrid renewable energy system. IntechOpen.
- Kuznyetsova, A., Boiarko, I., Khutorna, M., & Zhezherun, Y. (2022). Development of financial inclusion from the standpoint of ensuring financial stability. Public and Municipal Finance, 11(1), 20-36.
- La Rovere, E. L., Soares, J. B., Oliveira, L. B., & Lauria, T. (2010). Sustainable expansion of electricity sector: Sustainability indicators as an instrument to support decision making. Renewable and Sustainable Energy Reviews, 14(1), 422-429.
- Lahouirich M. W., El Amri, A., Oulfarsi S., Sahib Eddine, A., El Bayed Sakalli H., & Boutti, R. (2022). From financial performance to sustainable development: A great evolution and an endless debate. Financial Markets, Institutions and Risks, 6(1), 68-79.
- Loikkanen, T., & Hyytinen, K. (2011). Corporate social responsibility and competitiveness: Empirical results and future challenges. In R. L. Burritt, S. Schaltegger, M. Bennet, T. Pohjola, & M. Csutora (Eds.), Environmental Management Accounting and Supply Chain Management (pp. 151-170). Springer.
- Luo, X., & Li, Z. (2022). Impact of online community interaction on value co-creation: Evidence from China. Problems and Perspectives in Management, 20(1), 310-321.
- Makarenko, I., Sukhonos, V., Zhuravlyova, I., Legenchuk, S., & Szołno, O. (2020). Sustainability reporting assessment for quality and compliance: The case of Ukrainian banks’ management reports. Banks and Bank Systems, 15(2), 117-129.
- Makarenko, I., & Makarenko, S. (2022). Multi-level benchmark system for sustainability reporting: EU experience for Ukraine. Accounting and Financial Control, 4(1), 41-48.
- Makarenko, I., Plastun, A., Kozmenko, S., Kozmenko, O., & Rudychenko, A. (2022). Corporate transparency, sustainable development and SDG 2 and 12 in agriculture: The case of Ukraine. AGRIS on-line Papers in Economics and Informatics, 14(3), 57-70.
- Marin, L., Martín, P., & Rubio, A. (2017). Doing good and different! The mediation effect of innovation and investment on the influence of CSR on competitiveness. Corporate Social Responsibility and Environmental Management, 24(2), 159-171.
- Maxim, A. (2014). Sustainability assessment of electricity generation technologies using weighted multi-criteria decision analysis. Energy Policy, 65, 284-297.
- May, J. R., & Brennan, D. J. (2006). Sustainability assessment of Australian electricity generation. Process Safety and Environmental Protection, 84(2), 131-142.
- Miao, S., Tuo, Y., Zhang, X., & Hou, X. (2023). Green fiscal policy and ESG зerformance: Evidence from the energy-saving and emission-reduction policy in China. Energies, 16(9), 3667.
- Mishchenko, V., Naumenkova, S., Grytsenko, A., & Mishchenko, S. (2022). Operational risk management of using electronic and mobile money. Banks and Bank Systems, 17(3), 142-157.
- Msomi, T. S., & Kandolo, K. M. (2023). Sustaining small and medium-sized enterprises through financial awareness, access to digital finance in South Africa. Investment Management and Financial Innovations, 20(1), 317-327.
- Naeem, N., & Cankaya, S. (2022). The impact of ESG performance over financial performance: A study on global energy and power generation companies. International Journal of Commerce and Finance, 8(1), 1-25.
- Navickas, V., & Kontautiene, R. (2013). The interaction between corporate social responsibility and competitiveness during the economic downturn. Economic and Management, 18(1), 58-67.
- OECD. (2023). Global outlook on financing for sustainable development 2023: No sustainability without equity.
- Omelchenko, V. (2022, November 11). Sektor vidnovliuvanoi enerhetyky Ukrainy do, pid chas ta pislia viiny [Renewable energy sector of Ukraine before, during and after the war]. Razumkov Center. (In Ukrainian).
- Prokopenko, V., Biletskyi, I., & Vlasenko, T. (2023). Financial leverages of the regulation of residential construction. Financial and Credit Activity Problems of Theory and Practice, 2(49), 99-112.
- Rahman, M. M., Paatero, J. V., Lahdelma, R., & Wahid, M. A. (2016). Multicriteria-based decision aiding technique for assessing energy policy elements-demonstration to a case in Bangladesh. Applied Energy, 164, 237-244.
- Rating. (2021, April 16). TOP-200 naibilshykh kompanii Ukrainy za sumoiu splaty podatkovykh platezhiv za 2020 rik [TOP-200 largest companies of Ukraine by the amount of tax payments for 2020]. (In Ukrainian).
- Riofrio-Carbajal, M., Olavarria-Benavides, H. L., Robles-Fabian, D. A., & Cordova-Buiza, F. (2023). New tourist needs and perceptions on sustainability during the pandemic: An analysis of Paracas National Reserve, Peru. Innovative Marketing, 19(1), 37-47.
- Roldán, M. C., Martínez, M., & Peña, R. (2014). Scenarios for a hierarchical assessment of the global sustainability of electric power plants in México. Renewable and Sustainable Energy Reviews, 33, 154-160.
- Salim, H. K., Padfield, R., Hansen, S. B., Mohamad, S. E., Yuzir, A., Syayuti, K., Tham, A. Y., & Papargyropoulou, E. (2018). Global trends in environmental management system and ISO14001 research. Journal of Cleaner Production, 170, 645-653.
- Santoyo-Castelazo, E., & Azapagic, A. (2014). Sustainability assessment of energy systems: Integrating environmental, economic and social aspects. Journal of Cleaner Production, 80, 119-138.
- Shazly, M. A., AbdElAlim, K., Mortaky, A. N., & Sayed, M. N. (2022). The impact of corporate governance and audit quality on the investment decision. Financial Markets, Institutions and Risks, 6(3), 5-12.
- Simon, C. A. (2020). Alternative energy: Political, economic, and social feasibility. Rowman & Littlefield Publishers.
- Stamford, L., & Azapagic, A. (2014). Life cycle sustainability assessment of UK electricity scenarios to 2070. Energy for Sustainable Development, 23, 194-211.
- Surmanidze, A., Tabagari, K., Mushkudiani, Z., & Akhvlediani, M. (2022). Financial literacy exchange and its challenges in Post-Soviet Georgia. Knowledge and Performance Management, 6(1), 87-99.
- Transparency International. (2023). Corruption Perceptions Index 2022.
- Ukrinform. (2023, April 5). Damages to Ukraine’s energy infrastructure exceeded $10 billion – UNDP and the World Bank [Zbytky enerhetychnoi infrastruktury Ukrainy perevyshchyly $10 miliardiv – PROON i Svitovyi bank]. (In Ukrainian).
- United Nations Global Compact. (n.d.). See who’s involved. Our participants.
- United Nations. (2015). Transforming our world: The 2030 agenda for sustainable development.
- Vilanova, M., Lozano, J. M., & Arenas, D. (2009). Exploring the nature of the relationship between CSR and competitiveness. Journal of Business Ethics, 87, 57-69.
-
The role of accounting in sustainable development
Inna Makarenko ,
Alex Plastun
doi: http://dx.doi.org/10.21511/afc.01(2).2017.01
Accounting and Financial Control Volume 1, 2017 Issue #2 pp. 4-12 Views: 7823 Downloads: 4774 TO CITEIdeology of Sustainable Development and Sustainable Development Goals influence the transformation of business processes in the companies. Professional accountants are important part of this transformation. In this paper the role of accounting in Sustainable Development Goals achievement is discussed. Different approaches to structuring the role of professional accountants in Sustainable Development are investigated. Among them are types of roles that perform accountants, their professional functions, skills and competencies in the corporate environment. As the result a holistic vision of the role of accounting in sustainable development in the new economic conditions is provided.
-
IFRS convergence: opportunities and challenges in India
Accounting and Financial Control Volume 1, 2017 Issue #2 pp. 13-18 Views: 3834 Downloads: 1738 TO CITEPast decade has witnessed several changes in the process of conduct of business activities across the world especially due to the wave of globalization. It has also made drastic changes in the process of financial reporting, in particular the continuing adoption of IFRS (International Financial Reporting Standards) worldwide. IFRS are high quality, understandable, enforceable and globally acceptable accounting standards issued by IASB (International Accounting Standard Board). Thus these are a set of international accounting standards stating how a particular type of transaction and other events should be reported in the financial statements. Thus IFRS are designed as a common global language for business affairs so that company accounts are understandable and comparable across international boundaries. IFRS is becoming the global language of business with over 40% of the world adopting this as their standard for reporting. India also decided to converge to IFRS from 1st April 2016 in a phased manner, which in turn improves the financial statement comparability and transparency that helps to attract greater cross border investments. This paper focuses on the convergence of IFRS with Indian Accounting Standards, its utility, issues and challenges faced by the stakeholders. It also throws light to the ways through which problems can be addressed.
-
Sustainability reporting: An overview of the recent development
Inten Meutia ,
Zulnaidi Yaacob ,
Shelly F. Kartasari
doi: http://dx.doi.org/10.21511/afc.03(1).2020.03
Accounting and Financial Control Volume 3, 2020-2021 Issue #1 pp. 23-39 Views: 2414 Downloads: 819 TO CITE АНОТАЦІЯThis study aims to provide an extensive overview of the current state of sustainability reporting through the review studies on sustainability reports (SR) in the accounting literature for the period 2015–2020. A structured literature review (SLR) methodology is used to investigate how the SR literature develops and focuses. The study uses keywords such as “sustainability report” and “sustainability reporting” to identify studies that are relevant to a given topic. A total of 44 published studies were found. This study identifies the main directions of SR research in the 2015–2020 period and discusses several important aspects of research, namely methodology, research methods, and the theory used. To enrich the results, this study defines the scope, country of research, topics and sectors studied. The study provides insight into future SR research used by researchers to develop SR research. Several things are proposed that can be used as a guide for future SR research, such as sustainability in SMEs and the public sector. Ensuring sustainability is one of the research topics that can be a direction for researchers in the future. Theories such as contingency and source credibility can be an alternative to explaining the reality of sustainability reporting.
