Petro Bannikov

Type of the article: Research Article

The article determines that the direct impact of ESG indicators on the performance of companies using statistical models is very difficult to analyze, since most measures in the environmental, social and management sphere have a prolonged effect and a delayed economic effect. The purpose of the article is to form a methodology and analytical tools for assessing the impact of ESG measures on the efficiency of corporate activities of companies (financial and economic, social, environmental, organizational and managerial and reputational), as well as to verify their practical effectiveness based on empirical data from the international company CRH. The methodological basis of the study is based on a combination of multi-criteria analysis, expert assessment and elements of integral analysis, which allows for a comprehensive assessment of the effectiveness of the company’s ESG measures and to determine the level of integration of sustainable development principles into its business model. Within the framework of the use of multi-criteria analysis, an assessment system was developed with 35 analytical criteria for the impact of ESG practices, grouped into 5 main areas: economic efficiency, social development and human capital, environmental results, management practices, reputational and communication effects. The identified criteria make it possible to assess the effectiveness of ESG strategies and build a model of the impact of ESG on the company’s efficiency. The proposed comprehensive methodology was tested on the example of CRH, which made it possible to assess the effectiveness of its sustainable development strategy and the level of integration of ESG practices into the business model. The obtained value of the ESG Impact Index, the calculation of which is the final stage of the proposed comprehensive methodology, reached 64.8%, which indicates a significant level of integration of ESG principles into the corporate activities of CRH, which reflects a moderately high level of its non-financial efficiency and sustainable management. According to the results of the analysis of the indicators that form the ESG Impact Index, it was found that CRH has demonstrated significant success in achieving reputational advantages and transparency of reporting and management (in the management and organizational results block, 12 points out of a possible 12 were achieved). According to the results of using the methodology developed by us, it was found that CRH’s transition to circular production and support for the global initiative to reduce greenhouse gas emissions became the main factors that improved environmental results and contributed to obtaining a positive socio-economic and environmental effect.