Sustainability reporting assessment for quality and compliance: the case of Ukrainian banks’ management reports

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Management report is a new form of sustainability reporting (SR) in Ukraine, and its assessment for quality of environmental, social and governance (ESG) criteria disclosure and compliance among banks plays a crucial role for auditors in the verification process. The Quality and Compliance Bank Management Reports (Q&C BMR) Index methodology was developed for this purpose. The methodology includes a range of formal, content, assurance and disclosure scorings. According to the results of a continuous assessment of these management reports of 75 state, private and foreign-owned banks in Ukraine for the 2018 fiscal year, the average Q&C BMR Index is 61.2%. This indicates a fairly high level of quality and compliance with regulatory requirements for disclosure by banks of Ukraine in their SR. Differentiation of the studied population of banks in terms of Q&C BMR Index allowed distinguishing the following rating groups: А – leaders, B – pursuers, C – starters, and D – outsiders. There is a clear trend in the relationship between the ownership of a bank and its Q&C BMR index. Despite the rather high average value of the index, there is an opportunity to improve Ukrainian banks’ SR in the context of its further standardization and disclosure of the full set of ESGs – a criterion for all rating groups (especially C and D). Q&C BMR Index can be used as a benchmark by banks, regulators and auditors when comparing the level of disclosure by banks and their transparency.

Acknowledgment
The comments of an editor and anonymous referees have been gratefully acknowledged. Inna Makarenko gratefully acknowledges financial support from the Ministry of Education and Science of Ukraine – Corporate Social and Environmental Responsibility for Sustainable Development: Partnership of Stakeholders in the Real, Financial and Public Sectors of the Economy (0117U003933).

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    • Table 1. The procedure for regulating and publishing management reports by banks in Ukraine and their features
    • Table 2. A scoring criteria system for assessing the quality and compliance of management reports of Ukrainian banks Table 2. A scoring criteria system for assessing the quality and compliance of management reports of Ukrainian banks
    • Table 3. Grouping of Ukrainian banks by the value of the Q&C BMR index
    • Table 4. Grouping of Ukrainian banks according to the value of the Q&C BMR index and the type of ownership
    • Table A1. Q&C BMR index and bank rating in 2018
    • Conceptualization
      Inna Makarenko
    • Funding acquisition
      Inna Makarenko
    • Methodology
      Inna Makarenko, Victor Sukhonos, Sergiy Legenchuk
    • Project administration
      Inna Makarenko, Victor Sukhonos
    • Software
      Inna Makarenko
    • Validation
      Inna Makarenko, Iryna V. Zhuravlyova, Sergiy Legenchuk, Olga Szołno
    • Writing – original draft
      Inna Makarenko, Iryna V. Zhuravlyova, Sergiy Legenchuk
    • Investigation
      Inna Makarenko
    • Supervision
      Victor Sukhonos
    • Writing – review & editing
      Victor Sukhonos, Iryna V. Zhuravlyova
    • Formal Analysis
      Iryna V. Zhuravlyova, Olga Szołno
    • Resources
      Sergiy Legenchuk
    • Data curation
      Olga Szołno
    • Visualization
      Olga Szołno