Sustainable Development (ESG)

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The importance of sustainable development for business.  

Sustainable development has become a necessity for modern businesses. Improving efficiency, attracting investment and minimising environmental and social risks are just a few reasons why companies should integrate Environmental, Social and Governance (ESG) strategies into their operations. In line with international GRI standards and the CSRD directive, implementing sustainable practices enables businesses to remain competitive in the global market and meet investor expectations.
     

Why is ESG reporting and strategizing important? 
In light of the approaching year 2025, it is crucial for Ukrainian companies with subsidiaries or parent companies in the EU to develop and implement ESG (Environmental, Social and Governance) practices in line with the requirements of the CSRD (Corporate Sustainability Reporting Directive). This directive significantly strengthens the sustainability disclosure requirements for European companies and those operating in the European market. The main reasons why companies should focus on ESG reporting and strategizing in the context of the CSRD are as follows:
  1. Mandatory sustainability reports: Starting from 2025, companies subject to the CSRD will be required to provide detailed information on their environmental, social and governance practices. Reporting must comply with standards that ensure transparency and comparability of information, in particular, within the framework of EFRAG (European Financial Reporting Advisory Group) standards, which aim to unify reporting for investors and other stakeholders.
  2. Growing pressure from investors and regulators: CSRD requires companies to better understand and manage their ESG performance, allowing investors to make more informed decisions and contributing to a sustainable capital market. Investors are seeking transparency regarding sustainability issues and prefer companies with high ESG performance, which may affect access to capital.
  3. Reducing risks and increasing sustainability: ESG-oriented companies are better prepared for future regulatory changes, environmental challenges and societal pressures, which helps to mitigate risks associated with climate change, social instability and poor governance. The CSRD encourages companies to comprehensively assess ESG risks and opportunities, which contributes to their resilience and long-term stability.
  4. Reputational benefits and attracting clients: Sustainability issues are becoming increasingly important to consumers and partners, and CSRD helps companies strengthen their reputation as responsible and sustainable businesses. Transparent reporting helps to build trust and attract new customers who appreciate an ethical approach to business.

Key standards: ESRS, CSRD, GRI
  • ESRS (European Sustainability Reporting Standards): These standards define the requirements for sustainability reporting within the European Union. They form the basis for company reporting in 2023 and significantly impact investors.
  • CSRD (Corporate Sustainability Reporting Directive): This is a European Union directive that sets requirements for corporate reporting on ESG aspects.
  • GRI (Global Reporting Initiative): Global reporting standards for companies, enabling the assessment of sustainability performance and supporting engagement with all stakeholders.
 
ESG standards comparison 
Standard  Description Mandatory Coverage
ESRS European reporting standards Yes EU
GRI Global reporting standards No International

 

Benefits of ESG implementation   
Benefit Description
Attracting investment Enhancing investment attractiveness
Reputation improvement  Demonstrating social responsibility
Risk reduction     Identifying and minimizing ESG-related risks
 

What services do BDO specialists in Ukraine offer for the approval of your company’s sustainable development course? 
  • Assessing the current state of a company's compliance with ESG principles and providing recommendations for improvement — we help companies reduce risks, enhance reputation, attract investment and optimize processes in line with international standards and regulatory requirements. This contributes to sustainable development, unlocks opportunities for innovation, attracts talent and strengthens partnerships, increasing the overall competitiveness and sustainability of the business in the long term.
  • Developing long-term strategies for integrating ESG into all aspects of business — we help companies build sustainable business models that address environmental, social and governance aspects at all levels. This increases competitiveness, reduces risks, meets the expectations of investors and regulators, contributing to the growth of reputation and attractiveness for partners and employees, and ensures successful development for the future.
  • Identifying and analyzing ESG risks that a company may face and developing plans to minimize them — we help companies identify potential environmental, social and governance threats that may affect their operations and help them develop plans to minimize them. This helps to reduce the likelihood of financial and reputational loss, increase business sustainability and ensure its compliance with international standards, which is particularly important for long-term success and sustainable development.
  • Developing and implementing programs to support local municipalities, charity events and educational initiatives — we help companies strengthen their social impact, enhance their reputation and contribute to the sustainable development of society. In doing so, businesses cultivate strong ties with municipalities, increase customer and employee loyalty and demonstrate a responsible attitude towards society, which contributes to the company’s positive image and long-term stability.
  • Consultations and trainings on creating an inclusive work environment and supporting diversity — we help companies develop a culture of respect, openness and equality that attracts talented professionals from diverse social and cultural groups. This increases productivity, employee satisfaction, and creates a positive image of the company as a socially responsible employer, which is crucial for the long-term success and stability of the business.  

 

Benefits of partnership with BDO in Ukraine 
By selecting BDO in Ukraine as your sustainability partner, you receive the following benefits: 
  • Access to a global network of specialists and resources with in-depth knowledge of national standards and comprehensive experience.
  • Customized and flexible solutions tailored to your specific needs and goals.
  • High-quality and reliable services provided with professionalism and integrity.
  • Valuable and innovative approaches based on the latest trends and the best practices.
  • Long-term and trusting relationships based on mutual respect and cooperation. 
 

“Sustainability is not just a trend, it’s a strategic necessity for every business. Implementing ESG principles enables companies to stay competitive, reduce risks, and create value for all stakeholders.” — Anastasiia Skok, Head of ESG department at BDO in Ukraine.


If you would like to find out more about our sustainability services or embark on a journey towards a more sustainable and successful business, please get in touch. We would be delighted to answer any questions you may have, provide additional information and arrange a meeting with our experts. Don’t miss this opportunity to take your business to the next level with BDO Ukraine!
 

 

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Frequently Asked Questions (FAQ) about Sustainable Development (ESG)

  • What is ESG and why is it important for my business?

ESG (Environmental, Social, Governance) refers to the criteria used to assess a company’s environmental, social and governance practices. Implementing ESG approaches can help to reduce risks, attract investment and improve your company’s reputation.

  • How can BDO assist in developing an ESG strategy?

We assess your company’s current state, develop a bespoke strategy, integrate ESG principles into your business processes and provide support throughout the implementation process.

  • What ESG standards does BDO use?

We work with international standards such as ESRS, CSRD, and GRI to ensure compliance with the latest sustainability best practices.

  • How do we support ESG strategy assessment for small businesses?

We help small businesses develop and implement ESG strategies that are tailored to their specific needs. This involves assessing the current situation, identifying priorities and creating a customised ESG implementation plan that aligns with international standards and Ukrainian legislation.

  • What is “CSRD reporting” and how does it affect business in Ukraine?

CSRD (Corporate Sustainability Reporting Directive) is an EU directive that requires companies to report on their social, environmental and governance practices. It affects all businesses working with European partners or holding international investments. For Ukrainian companies cooperating with the EU, CSRD compliance will become mandatory, requiring transparency in matters of sustainability, the environment, and social responsibility.

  • Can ESG strategies be adapted to specific regional requirements?

Yes. We consider the unique environmental, social and economic conditions of each region, as well as local legal requirements. We adapt ESG strategies for Ukrainian enterprises based on global standards (e.g. GRI and CSRD) and national regulations and market specifics.

  • How does BDO support ESG strategy development for large businesses?

We develop comprehensive ESG strategies for large companies, covering all aspects of sustainability, including environmental initiatives, social responsibility, corporate governance and effective risk management. We collaborate with senior management to integrate ESG principles into the company’s culture and guarantee adherence to international reporting standards.


Glossary

AI for ESG — the use of artificial intelligence for ESG data analysis, reporting automation, and risk assessment. 

Anchor regulation — key regulatory frameworks (such as the CSRD or the EU Taxonomy) that establish ESG reporting requirements.

Clawback in ESG — a mechanism for reclaiming bonuses or incentives from managers if ESG targets are not met.

Corporate reporting — a company’s system of financial and non-financial disclosures for investors, regulators and other stakeholders.

CSRD (Corporate Sustainability Reporting Directive) — the EU directive that sets mandatory sustainability reporting requirements for large companies and SMEs.

Deferral of reporting — the possibility for companies to postpone ESG reporting during adaptation to new standards.

Double materiality — a concept requiring companies to assess both the impact of ESG factors on their business and the impact of their business on the environment and society.

ESG (Environmental Social Governance) — a framework for evaluating companies based on sustainability and responsible business practices. It is used by investors, banks, and regulators in decision-making.

ESG disclosure — the publication of company data on environmental, social, and governance practices.

ESG rating — an independent assessment of a company’s ESG performance, used in investment decision-making.

ESG standard — a set of rules and norms governing the evaluation of ESG factors in company’s operations.

ESRS (European Sustainability Reporting Standards) — the EU sustainability reporting standards that specify CSRD requirements.

Governance — the core element of ESG that covers corporate transparency, ethics, and anti-corruption practices.

GRI (Global Reporting Initiative) — an international sustainability reporting standard widely adopted by companies worldwide.

Greenwashing — a practice in which companies claim to be environmentally or socially responsible without genuine action.

Micro, Small and Medium Enterprises (MSMEs) — a business sector for which specific ESG reporting tools have been developed.

MSP tools — simplified standards, platforms, and programs designed to help SMEs implement ESG reporting.

Non-financial reporting — company disclosures on non-financial aspects of operations, including environmental, social and governance issues.

Omnibus regulation — a general EU regulation that covers multiple areas, including ESG reporting.

Reporting standard — a set of requirements defining the structure and content of corporate ESG reports.

Responsible business — a business model that integrats social and environmental factors into company strategy.

SMEs (Small and Medium Enterprises) — enterprises classified by employee count and financial criteria, subject to adapted ESG requirements.

Sustainability — a concept of balanced economic, social, and environmental development that does not compromise the needs of future generations. 

Sustainable finance — financial instruments and investments aimed at supporting ESG