Assessing the spread and coverage of ESG practices in Russian companies
Аннотация
In the last decade, sustainability issues have significantly gained in popularity (Bebbington, 2001;Bansal, 2002;Barkemeyer et al., 2014;Mio et al., 2020;ElAlfy et al., 2020;Van Zanten, 2021). Environmental, social and governance (ESG) aspects have become an important part of modern companies' strategies, having a significant impact on their reputation (Jeffrey et al., 2019;Liu, 2022;Kim et al., 2023), financial stability (Koundouri et al., 2022;Lisin et al., 2022;Lupu et al., 2022) and competitiveness (Mohammad & Wasiuzzaman, 2021;Chang & Lee, 2022;Katsamakas & Sanchez-Cartas, 2023). One of the key components of sustainable development is ESG principles implemented and followed by business entities (Li et al., 2021;Dathe et al., 2024). This area is becoming especially relevant amid the growing pressure from investors, regulators and the public demanding corporate practices to be transparent and responsible (Kolk, 2008;Heikkurinen & Bonnedahl, 2013;Calabrese et al., 2021;Krasodomska et al., 2023). The fact of ESG factors being crucial for sustainable business development is convincingly confirmed. In this context, special attention is paid to empirical studies aimed at assessing the current state and prospects for the spread of the ESG agenda in various countries, industries and companies (for example, companies in Canada - Davis & Searcy, 2010;in Dutch -Asif et al., 2013;in Australia -Lokuwaduge & Heenetigala, 2017;in Italy -Izzo et al., 2020;Bonfanti et al., 2023;multinational companies -Kolk, 2008).Globally, significant progress has been made in standardizing ESG disclosure through regulations and market-driven initiatives. In the European Union, the Corporate Sustainability Reporting Directive (CSRD) mandates ESG disclosures for large and listed companies, fostering data comparability and reliability across member states. Similarly, China has developed a national ESG framework aligned with its green finance policies, while the United States increasingly relies on ESG data for risk assessment and shareholder advocacy. These developments contrast with the situation in Russia.By turning to the experience of Russian companies, we aim to demonstrate local peculiarities of the ESG agenda. Under global challenges, Russian business faces the need to adapt to new requirements for sustainable development (Blokhin & Kuvalin, 2023). Despite significant progress, the introduction of the ESG agenda in Russia is associated with a number of barriers and restrictions (Bella & Ani, 2023;Izmaylova, 2022). In Russia, ESG reporting is not mandatory for companies. Instead, the government has proposed a standard of a recommendatory nature (the Order of the Ministry of Economic Development of the Russian Federation, 2023), which includes 44 basic indicators of sustainable reporting. These indicators are designed to form a basis for voluntary disclosure of corporate responsibility data. Lack of mandatory requirements for non-financial disclosure in Russia causes a serious problem in assessing companies' current ESG commitment, which is primarily due to a significant information gap. Furthermore, amid the sanction standoff, in 2022 the Russian government allowed issuing companies to publish corporate information only partially or avoid disclosing it at all if this could interrupt their ongoing operations. This relaxation applies to interim and annual financial statements, including consolidated ones, audit reports and other sensitive corporate information, which may also cover details on the ESG agenda. Owing to this information gap, it is rather problematic to fully understand and analyze the extent to which companies in Russia integrate environmental, social and governance principles into their activities. This dual context underscores the significance of the research and highlights the urgent need for a more comprehensive understanding of the reporting practices. Therefore, the relevance of the research is due not only to the growing interest in the topic of sustainable development, but also to the need for systematizing and generalizing the Russian companies' ESG experience to close the gaps.These premises outlined the purpose of our study, that is to form and conduct a primary analysis of a data set reflecting the level of distribution and coverage of the ESG agenda in Russian companies. The central research question underlying this article is formulated as follows: To what extent do Russian companies integrate the principles of environmental, social, and corporate responsibility into their operations? This question directs the analysis of the results obtained and frames the discussion. The research aims to close the current information gaps in this area,the present a novel empirical dataset, which will contribute to a deeper and more objective assessment of ESG principles in Russian corporate practice and will also provide a more transparent and high-quality basis for decision-making.To that end, a data panel was compiled based on 2022 non-financial reports of companies operating in various sectors of the economy. The study's methodology integrates the systematic collection of ESG metric data with an analysis of the sample structure, descriptive statistics, and the representativeness of the sample. Unlike existing qualitative assessments or sector-specific case studies, our approach allows for a comparative analysis of ESG adoption levels and highlights systemic challenges in corporate sustainability disclosure. The results of the empirical analysis can be useful both for companies seeking to improve their ESG indicators and get a deeper understanding of the current state and prospects, and for stakeholders interested in the sustainable development of business in Russia.The growing academic interest in ESG practices reflects the expanding role of sustainability in corporate strategy. Numerous international studies examine how companies integrate ESG principles into business operations and how these factors influence financial and non-financial outcomes. Kolk (2008) and Heikkurinen and Bonnedahl (2013) analyze the reporting strategies of multinational companies, emphasizing differences between market-and stakeholder-oriented approaches. Izzo et al. (2020) and Bonfanti et al. (2023) assess the quality of sustainability disclosures, finding that alignment with Sustainable Development Goals remains inconsistent across sectors. Studies from Canada (Davis & Searcy, 2010), the in Dutch (Asif et al., 2013), and Australia (Lokuwaduge & Heenetigala, 2017) reveal a gradual institutionalization of ESG reporting frameworks. Mohammad and Wasiuzzaman (2021) show that Malaysian firms with stronger ESG disclosure benefit from greater competitive advantage. Katsamakas and Sanchez-Cartas (2023) use computational modeling to demonstrate the impact of ESG strategies on market competition. These works provide valuable comparative insights, yet they largely focus on countries with institutionalized ESG disclosure mechanisms, which may limit their applicability to countries with voluntary reporting systems.In the Russian context, the literature is less developed and primarily descriptive in nature. Studies by Izmaylova (2022) and Bella and Ani (2023) discuss barriers to ESG implementation under geopolitical and regulatory uncertainty, highlighting limited adoption of global standards. A small number of empirical studies have emerged, offering partial quantitative insights into ESG-related issues. For example, Bataeva, Kokurina, and Karpov (2021) assessed the impact of ESG disclosure on the financial performance of Russian public companies, finding that more transparent reporting practices are associated with improved financial indicators. In a related study, Bataeva and Karpov (2023) examined how elements of corporate governance affect the extent of ESG information disclosure, highlighting the role of board independence and ownership concentration. Fedorova and Salnikova (2024) explored the market effects of environmental disclosures, demonstrating a statistically significant relationship between the publication of green initiatives and short-term stock price movements. However, these studies do not provide a comprehensive statistical overview of ESG metrics across the broader corporate landscape. Most studies rely focus on financial performance linkages, without examining the structure and variability of ESG disclosures themselves. Our study addresses this gap by assembling a structured and statistically validated dataset of ESG indicators and analyzing coverage patterns across a representative sample of Russian companies from different sectors.For the purposes of the study, we have collected and analyzed 2022 non-financial reports of Russian companies from various industries published in the public domain (the latest available report at the time of the research). The reports covered information on the companies' environmental impact, social aspects of their activities and corporate governance issues.Inclusion and exclusion criteria for forming the sample can be formulated as follows.Non-financial reports were collected through a search query focused on companies that had publicly posted a "sustainability report" or a "non-financial report" for 2022. The search was carried out in January-February 2024. The data for analysis were retrieved from companies either indexed in the Interfax Corporate Information Disclosure Center system (Interfax-CIDC, https://www.e-disclosure.ru) which stores mandatory and voluntary reports of issuing companies or those posting this information on their own websites.Certain industries, particularly small and medium-sized enterprises (SMEs), were excluded due to a lack of publicly available non-financial reports. This limitation arises from resource constraints and the absence of mandatory disclosure requirements, which hinders their ability to produce detailed sustainability reports. As a result, the dataset predominantly reflects the practices of large companies.The scope of the empirical study covers objects of various organizational and legal forms. The study included legal entities in the form of both commercial corporate organizations (joint stock companies, limited liability companies) and commercial unitary organizations (federal state unitary enterprises).The exception is the state corporation Rosatom, which, according to its organizational and legal form, is a non-profit unitary organization. However, it should be borne in mind that Rosatom's activity should be regarded as exclusively commercial considering the other firms owned by the holding company.The empirical study did not include legal entities in the form of non-profit corporations, as well as organizations without forming a legal entity, and international organizations operating in Russia. The sample does not cover organizational and legal forms of individual activity (sole proprietorship).The sample included 109 companies varying in revenue and the number of employees. The composition of the sample is given in the dataset [Table S1, available in Supplementary Materials].More than half of the sample (58.7%) is comprised of power suppliers and gas companies (31.2%) and manufacturing companies (27.5%); mining companies and transport/storage companies constitute 16.5% and 14.7% of the sample, respectively. This quantitative distribution of the companies emphasizes the importance of fuel, energy and manufacturing sectors in the sample under study [Table S2, available in Supplementary Materials]. The other companies in the sample are engaged in agriculture and forestry (0.9%), water supply and waste management (1.8%), construction (1.8%), finance and insurance (1.8%), information and communications (2.8%), and real estate (0.9%).Companies from other sectors of the economy were not included in the sample.The quantitative distribution of the companies in the sample does not provide a full picture of how significant their contribution is to the overall spread of ESG principles among all companies. To assess this contribution more accurately, we refine the sample structure based on the companies' staff numbers and their revenue for the reporting period [Fig. S1, available in Supplementary Materials]. By doing so, we take into account the scale of the companies' activities, their economic and social impact, which is of high importance for understanding the real dissemination and implementation of ESG principles.As seen from Fig. S1, the sample companies are concentrated in a few key areas. More than 60% of companies have an average headcount of 1,000 to 25,000 workers [Fig. S2, available in Supplementary Materials]. Annual revenue of the same 60% of companies ranges from 10 to 250 billion rubles [Fig. S3, available in Supplementary Materials]. This indicates the predominance of large businesses in the sample, which more accurately reflects the overall corporate ESG approach. The spread of ESG initiatives begins with large businesses and gradually extends to medium-sized and small businesses. Large companies play a leading role in the design and implementation of sustainable development strategies (Aastha & Shazi, 2019;Karuppiah et al., 2020;Mahmood et al., 2021;Bielawska, 2022;Morais et al., 2022), thus setting an example for others. Medium-sized and small businesses, following the example of large corporations, also start actively implementing ESG principles by adapting them to their scale and activities (Jenkins, 2006).According to Figures S2 andS3, small and medium-sized enterprises (SMEs) are virtually not represented in the sample. In terms of revenue, only five companies from the sample (4.6%) can be classified as SMEs hiring less than 1% of the sample companies' employees. These two parameters taken together indicate that there are no SMEs in the sample.At the same time, SMEs may follow the ESG agenda, but not record the results in non-financial report (Rossi & Luque-Vílchez, 2021;Shalhoob & Hussainey, 2022). This may be due to various reasons, including limited resources, lack of experience in preparing such reports or lack of requirements for their mandatory publication (Coppa & Sriramesh, 2013;Conway, 2015;Ņikadimovs, 2023). As a result, these companies' remarkable achievements in the field of sustainability and corporate social responsibility may go unnoticed.It is worth noting here that SMEs criteria differ substantially in various countries. These criteria usually include the number of employees, annual revenue and/or balance sheet/capital of the company, industry (Campa et al., 2015). Therefore, the conclusions and analysis of the sample distribution were made based on the regulatory requirements for determining SMEs types in Russia. Using other criteria may to some extent alter or limit conclusions and assumptions; however, in our opinion (based on the variation of SMEs criteria applied globally), they will be consistent with the general corporate trend towards the spread of the ESG agenda.To assess the quality of the sample, the margin of error for the proportion without repeated observations was calculated with an accuracy of 90%, 95%, and 99% [Table S3, available in Supplementary Materials]. In all cases under study, the actual error did not exceed 9% with an average ∆p of 6.82% with an accuracy of 99% based on the companies' revenue and headcount. This indicates that the sample is sufficiently representative for further research. The sample mirrors the real state of the studied characteristics within acceptable deviations. This assessment confirms that the sample adequately represents the population and allows drawing informed conclusions about the state and trends in the field of sustainable development of companies in Russia.The margin of error was not calculated for the parameter 'the total number of legal entities (companies)', since the sample coverage rate for this parameter is extremely small (0.004%). This is by sample coverage in terms of revenue of and headcount of Therefore, the coverage rate by the number of legal the sample remains and for coverage by these key parameters allows to at informed conclusions about the state of the population under as well as the of non-financial reporting organizations and and a primary of non-financial reports collected as part of the study to their and is that the non-financial reports under were in terms of and of information disclosure. were of a the problem of a reporting For this and other reasons, the five non-financial reporting organizations and have published a of to Corporate Reporting statistical were applied to analyze ESG with a focus on assessing the variability and distribution of ESG indicators among the companies examined in the The analysis key statistical including and for ESG These an objective of the distribution patterns and variability of within the sample, offering insights into the extent of ESG across companies.The study represents a of the companies' ESG which causes in both of and of between different This of trends and which is especially important for understanding the of companies' ESG agenda. 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The indicators analyzed as part of the study various aspects of and composition of activity and [Table available in Supplementary our study, the environmental responsibility metrics were into two The [Table available in Supplementary covers the [Table available in Supplementary the that the companies to environmental effects and environmental empirical analysis significant variation in ESG disclosure levels across the sample, reflecting differences and the voluntary nature of ESG practices in Russia. of companies had more than five of experience in non-financial only of these levels and lack of governance the average of board remains of international practices. only of companies have ESG risk management which their ability to indicators are from especially the energy and industries, more reporting. in the and energy were more to environmental metrics in terms of the of waste by and no less information on other The analysis of between the overall sample and the companies of the and energy did not reveal significant differences in environmental responsibility indicators related to the level of environmental metrics were more across all sectors. of companies composition and However, the average proportion of in remains at to in the total This highlights In companies, these gaps were more due to and only of companies data on with or the limited scope of only a part of the insights that can be from the analysis of the The structured and nature of the data further of between ESG indicators and characteristics as studies may on this to conduct and of ESG study collected an data set key aspects of environmental, social and governance performance of Russian companies. The data was structured according to a of ESG agenda of the collected data allows to assess the extent of coverage and of ESG principles in the corporate as well as existing gaps and challenges related to disclosure and of ESG reporting. The results obtained contribute to a deeper understanding of the current level of ESG responsibility and as an important basis for further research and in the field of sustainable The study the for of corporate of the ESG agenda. research should focus on key a more detailed analysis of the of ESG adoption across various industries and companies of different is to factors and the methodology for analyzing ESG reporting further including the development of more for data by companies. comparative of ESG practices across or countries trends and the understanding of ESG analysis can be to trends in ESG an assessment of the of practices based on the results of the it is to for the dissemination of ESG practices across all levels of the of sustainable development and their into corporate These will a deeper understanding of trends and provide for sustainability in corporate activities.