“SDGs and ESG disclosure regulation: is there an impact? Evidence from Top-50 world economies”

This paper explores the influence of the ESG disclosure regulation (government corporate ESG disclosure and non-government corporate ESG disclosure) on the ranking in 50 largest economies. Applying various statistical methods and techniques, including both parametrical (Student’s t-test, ANOVA analysis) and non-parametrical (Mann-Whitney U test) tests, simple average analysis, OLS with dummy variables method and multiple linear regression analysis, as well as correlation analysis and Granger causality test, several hypotheses are tested. The hypotheses stipulate whether or not ESG disclosure regulation differs in developed and emerging countries and whether or not ESG disclosure regulation influences the country’s SDGI ranking, as well as the ranking of the country among 50 largest economies. According to the results, the differences in ESG disclosure regulation are statistically significant in developed and emerging countries. The level of ESG disclosure compliance is higher in developed countries. ESG disclosure regulation influences the position of the country in SDGI and 50 largest economies rankings. The more country complies with ESG disclosure criteria, the better position in rankings is. Incorporation of ESG criteria is an important evolutionary step in economic development of the country. It allows increasing position of the country in 50 largest economies and SDGI ranking. Thus, ESG disclosure regulation is vital for the development of the country in the modern world.


INTRODUCTION
The introduction of 17 UN Sustainable Development Goals (SDGs) and their 169 targets and 230 indicators at the 2015 New York Summit was an important step forward for humanity towards sustainable development.By 2030, they set key benchmarks and indicators at the global level for poverty reduction, gender equality, and education for all, the well-being and health of humankind, sustainable economic, urban, and infrastructure development, and the preservation of the environment and all resources.The development of tools to achieve these benchmarks lies in the coordination of national efforts (in the form of roadmaps for SDGs of each country and progress reports) and global multi-stakeholder partnerships, regardless of the status of a developed or developing country.
One of the tools for achieving the SDGs is to strengthen the regulatory requirements for the disclosure of information by companies on environmental (E), social (S), and governance (G) (ESG) criteria.Ensuring the transparency of the business environment and reporting on the incorporation of CSR into the activities of companies is the key to effective monitoring of progress in achieving SDGs in the corporate sector.
The last decade has been marked by the dynamic development of regulatory disclosure tools based on ESG criteria and SDGs.More than 300 of such instruments, governmental and non-governmental, mandatory and voluntary, have been introduced in 50 largest countries by GDP (both developed and developing (UNPRI, 2016b).
The study of the experience of the world's 50 largest economies shows the significant attention of regulators in these countries to the formation of national regulation of ESG disclosure according to SDGs.
Ukraine's adoption of a national SDGs target system in 2017 unites it with the global community.However, the level of SDGs progress in our country compared to 50 leading countries in the world is low -46 th place out of 149 countries in 2016 Global SDG Indicators Database (SDG Indicators, 2016).Approval of Decree of the president of Ukraine No. 722/2019 from 30/09/2019 "About the Sustainable Development Goals of Ukraine for the period up to 2030," Order of the Cabinet of Ministers of Ukraine "On approval of the Concept for the implementation of state policy in the field of promoting the development of socially responsible business in Ukraine for the period up to 2030" and Decree of the President of Ukraine No. 722/2019 from 30/09/2019 "About the Sustainable Development Strategy "Ukraine -2020" remain a minimal step on Ukraine's path to the SDGs.
Therefore, the study of the impact of regulatory tools for ESG disclosure in the largest world economies and the level of achievement of the SDGs by them is an important scientific and applied task.To see whether or not there are differences in ESG disclosure regulation in developed and emerging countries and whether or not ESG disclosure regulation influence SDGI ranking and position in 50 largest economies ranking the following hypotheses are tested in this study: H1: The level of ESG disclosure compliance is higher in developed countries.H2: SDGI ranking of the country is influenced by ESG disclosure regulation.H3: ESG disclosure regulation influences the ranking of the country among 50 largest economies.H4: ESG disclosure regulation influence on SDGI ranking is different for government and non-government disclosure.

LITERATURE REVIEW
ESG and SDGs information disclosure and its regulation have a short history in the works of scientists given their dissemination since 2015 at the global level.Since then, SDGs have been studied mainly in the context of investor decision-making for responsible investment and benchmarking in financial markets, taking into account generally accepted guidelines in the field of sustainable development.
Thus, Trabacchi and Buchner (2019) provide evidence in SDG-informed capital allocation decision-making for investors and valuable instruments for investing capital into activities supporting the SDGs.Adams (2020) emphasizes the importance of promoting Sustainable Development Goal Disclosure (SDGD) Recommendations agreed by the most reputable accounting organizations, standards such as: • The Association of Chartered Certified Accountants (ACCA), • Chartered Accountants ANZ, • the Institute of Chartered Accountants of Scotland (ICAS) • the International Federation of Accountants (IFAC), • the International Integrated Reporting Council (IIRC) • the World Benchmarking Alliance (WBA).
Thus, the attention to the SDGs as a basis for the presentation of information on ESG criteria is growing both in academia and at the level of international organizations for accounting standardization.
At the same time, in the analyzed works, the authors focus on the role of SDGs mostly as a basis for decision-making by investors or information disclosure.Moreover, the level of research based on this is individual -at the level of investors or companies that integrate SDGs into their business strategy and responsible behavior.Studies of the relationship between the national levels are poorly understood.The initial data set is divided into the following sub-sets: data for developed countries and data for emerging countries.
The average analysis approach is used to obtain preliminary evidence in favor of differences between analyzed data sets in different dimensions: ESG disclosure regulation, SDGI, and 50 largest economies rankings.
The use of parametric and non-parametric tests allows seeing whether or not differences between analyzed data sets are statistically significant.
To get additional evidence, multiple regressions with a dummy variable are used: where Y i -the value of ESG criterion for developed country i; a 0 -mean ESG criterion value for the developed countries; a 1 -a slope for the dummy variable D i ; D i -a dummy variable for the emerging countries, equal to 1 for the case of data values from emerging countries and 0 if data values do not correspond to the emerging countries; ε i -error for the case i.
In favor of difference between analyzed data sets evidence the size, sign and statistical significance of the dummy coefficients, correlation analysis, Granger causality test, and multiple regression analysis are used to test Hypotheses 2-4.

RESULTS
Let us start with H1: The level of ESG disclosure compliance is higher in developed countries.
Average analysis provides clear evidence in favor of higher ESG disclosure compliance in developed countries (Appendix B).
To find whether or not these differences are statistically significant, several statistical tests are performed.OLS with dummy variables method is used as an additional technique.Overall results are presented in Appendix C. Overview of these results is provided in Table 3. Note: "+" -difference between developed countries and emerging countries data sets is detected; "-" -difference between developed countries and emerging countries data sets is not detected.
As can be seen, the level of ESG disclosure compliance is different in developed and emerging countries.In general, it is higher in developed countries.Hypothesis 1 is accepted.
Next, hypotheses H2-H4 are tested.The authors start with the correlation analysis to find evidence that ESG disclosure regulation influences SDGI ranking and ranking of the country among 50 largest economies.The results are presented in Appendix D.
Overall, there is no stable correlation between ESG disclosure regulation and SDGI ranking or ranking of the country among 50 largest economies.
However, there are a few exceptions.For example, for the case of all data sets, there is a rather strong positive relationship between government corporate ESG disclosure and SDGI ranking.Overall, it looks like SDGI ranking and ranking of the country among 50 largest economies are not influenced by ESG disclosure regulation.
Next, the Granger causality test is performed (see Appendix E).The overview of the Granger causality test results is presented in Table 4.
These findings confirm the results of correlation analysis: causalities between ESG criteria and analyzed indicators (both 50 largest economies and SDGI rankings) are not detected.Usually, parameter Rank acts as the dependent variable.This is indirect evidence in favor of H2: SDGI ranking of the country is influenced by ESG disclosure regulation.
Next, hypotheses H2 and H4 are tested.For these purpose, multiple regression analysis is used.The results for the models with SDGI score as the dependent variable and ESG criteria as independent variables are summarized in Table 5.Based on these results, the models with non-government corporate ESG disclosure as an independent variable were developed (Table 6).
As can be seen, F criterion increase in both cases, so the overall quality of these models is higher.
These results clearly show that the use of non-government corporate ESG disclosure influences SDGI score -the more ESG criteria are satisfied, there higher the score is.It should be mentioned that this rule works much better for the case of emerging countries.Note: "+" -statistically significant dependence between X and Y variables is detected; "-" -statistically significant dependence between X and Y variables is not detected.
On the final stage, H3 is tested.The following multiple regression model is run: ranking in 50 largest economies as dependent variable and ESG criteria and SDGI ranking as independent variables (Table 7).
As can be seen in the case of ESG criteria and SDGI ranking as independent variables, there are no suitable linear models.Thus, multiple regression analysis is run with only ESG criteria as independent variables (Table 8).
The best model (with statistically significant parameters) is as follows: p-values < 0.05 for all coefficients and F criterion exceeds critical value.Multiple R0.49where Y iis rank in the ranking in 50 largest economies of i-th country; a 1 -non-government corporate ESG disclosure, As can be seen (Eq.2), the more ESG criteria are used for disclosure regulation, the higher the country's ranking.Non-government corporate ESG disclosure has the biggest influence.
According to these results, the non-government corporate ESG disclosure is a primary object to start with if the country wants to incorporate ESG disclosure regulation and improve its position in the 50 largest economies ranking.
In general, there is evidence in favor of hypotheses H2-H4.ESG disclosure regulation can influence the position of the country in 50 largest economies ranking.The more country complies with ESG disclosure criteria, the better position in the ranking is.Hypotheses are tested using different statistical tests (parametrical and non-parametrical), simple average analysis, OLS with dummy variables method, correlation analysis, Granger causality test, and multiple linear regression analysis.
Based on the results, the following conclusions are obtained: 1.The level of ESG disclosure compliance is different in developed countries and emerging countries.
2. ESG disclosure compliance is higher in developed countries.
3. ESG disclosure regulation influences the position of the country in SDGI ranking and 50 largest economies.The more country complies with ESG disclosure criteria, the better position in the ranking is.This rule works much better for the case of emerging countries.
The results provide additional evidence in favor of differences in ESG disclosure regulation in developed and emerging countries.However, the incorporation of ESG criteria is an important evolutionary step in the country's economic development.It allows increasing the country's position in 50 largest economies and SDGI ranking.Thus, ESG disclosure regulation is vital for the development of the country in the modern world.

Table 2 .
Countries with the biggest progress in achieving SDGs and their share of ESG disclosure in annual company reports in 2016-2017 Source: Compiled by the authors from KPMG (2017), UNPRI (2016a,c), SDG Indicators (2016).
The current work is a continuation of our previous research on ESG disclosure regulation relationship with the countries' competitiveness (Plastun, Makarenko, Kravchenko, Ovcharova, & Oleksich, 2019).There are two types of ESG disclosure regulation: government and non-government.The dominant drivers of ESG disclosure promotion are government disclosure requirements.Non-government disclosure requirements, in particular exchange requirements, are clearly the next step in regulating such disclosure.Among 20 countries with the highest SDGs score, mandatory or voluntary government or non-government regulations for ESG disclosure were introduced (Table 2).tion about the ranking in 50 largest economies is UNPRI (2016c).The period of the analysis is 2016 (the latest available period with data for all analyzed indicators).Data are summarized in Table A1.To test these hypotheses, both parametrical and non-parametrical tests are used to incorporate possible compliance/incompliance of the data to the normal distribution.For these purpose, the following tests are used: parametrical (Student's t-test, ANOVA analysis) and non-parametrical (Mann-Whitney U test).Simple average analysis and OLS with dummy variables method are used as additional techniques to avoid possible methodological bias.

Table 3 .
Overview of the empirical results for H1

Table 4 .
Overview of the Granger causality test results

Table 6 .
Multiple regression analysis: SDGI score (Y) and non-government corporate ESG disclosure regulation (X)

Table 7 .
Multiple regression analysis: ranking in 50 largest economies (Y) and SDGI ranking and ESG disclosure regulation (X)

Table 8 .
Multiple regression analysis: ranking in 50 largest economies (Y) and ESG disclosure regulation (X)This paper explores the influence of the ESG disclosure regulation on the ranking of 50 largest economies.To do this, several hypotheses are tested: (H1) -the level of ESG disclosure compliance is higher in developed countries; (H2) -SDGI ranking of the country is influenced by ESG disclosure regulation; (H3) -ESG disclosure regulation influences ranking of the country among 50 largest economies; (H4) -ESG disclosure regulation influence on SDGI ranking is different for government and non-government disclosure. (2)p://dx.doi.org/10.21511/ppm.18(2).2020.20CONCLUSION

Table A1 .
Problems and Perspectives in Management, Volume 18, Issue 2, 2020 Initial data set Note: DC is used for developed countries; DEC is used for developing and emerging countries.

Table E3 .
Ranking in 50 largest economies (X) and government corporate ESG disclosure (Y)

Table E4 .
Ranking in 50 largest economies (X) and non-government corporate ESG disclosure (Y)

Table E9 .
Government corporate ESG disclosure (X) and non-government corporate ESG disclosure (Y)