The Methodology for Evaluating ESG Compliance with the Micro-Level Criteria
Lagodiyenko O. V.

Lagodiyenko, Oleg V. (2024) “The Methodology for Evaluating ESG Compliance with the Micro-Level Criteria.” The Problems of Economy 3:178–187.
https://doi.org/10.32983/2222-0712-2024-3-178-187

Section: Economics and Enterprise Management

UDC 339.187

Abstract:
The article is devoted to the theoretical and methodological issues of assessing the compliance of enterprises with ESG criteria at the micro level. The relevance of the given topic and the presence of previously uncovered parts of the general problem determined the purpose of the study, namely the development of a methodology for assessing the compliance of enterprises with ESG criteria at the micro level. The article proposes a methodology for assessing the compliance of enterprises with ESG criteria at the micro level, which, unlike the existing ones, provides a systematic approach to assessing the environmental (E), social (S) and governance (G) components of companies’ activities. The developed methodology takes into account both general indicators for all enterprises and industry specifics, which allows for a comprehensive assessment taking into account the specifics of each company. The assessment system is based on a rating model, where each indicator is assigned a score of 0, 0.5 or 1, which reflects the level of compliance with the criteria of sustainable development. The integral ESG indicator is formed on the basis of the arithmetic mean of the scores for all three categories. This makes it possible to classify enterprises according to levels of compliance: from the initial level (C) to the advanced (A). The proposed methodology enables enterprises to get a clear picture of their compliance with ESG standards, identify weaknesses and areas for improvement. Particular attention in the methodology is paid to environmental management, environmental impact, resource administration, as well as interaction with stakeholders and the corporate governance system. The study substantiates that the proposed methodology contributes to improving the efficiency of the implementation of ESG principles in enterprises, helping them to adapt to the requirements of the market and investors focused on sustainable development. The proposed system, in comparison with the existing ones, is universal and can be used to assess enterprises in various sectors of the economy, in particular the financial and industrial sectors. Further research could be aimed at expanding the indicators, automating the assessment process, and adapting the methodology to international markets, making it even more relevant to global business.

Keywords: ESG criteria, compliance assessment, sustainable development, environmental management, social responsibility, corporate governance, rating models, scoring system, environmental sustainability.

Tabl.: 16. Formulae: 1. Bibl.: 8.

Lagodiyenko Oleg V. – Candidate of Sciences (Economics), Candidate on Doctor Degree, Department of Digital Technologies of Financial Operations, Odesa National University of Technology (112 Kanatna Str., Odesa, 65039, Ukraine)
Email: oleg@ethicontrol.com

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