Energy companies’ transparency: Toward competitiveness and SDG 7 progress

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The disclosure of information on sustainability by energy companies is a guarantee of increasing their competitiveness in achieving Sustainable Development Goal 7 and the post-war recovery of the Ukrainian energy sector. This paper aims to evaluate the sustainability transparency reporting of energy companies in Ukraine and connect the level of such transparency and their competitiveness. The study used the Transparency Index to analyze information disclosure on sustainability by 50 energy companies in Ukraine, the largest taxpayers. It is based on SDG, CSR, and ESG criteria and shows the companies’ ratings. It was found that companies with a low disclosure of SDG, CSR, and ESG criteria have the largest specific weight (76%) among the respondents. The undisputed leader in sustainability transparency is Energoatom, while only 11 companies out of 50 surveyed have an A and B rating (the highest and higher level of transparency). The index was used as a factor variable in the non-parametric modeling of the relationship between the sustainability transparency of energy companies in Ukraine and their competitiveness (company return, profitability, and profit margin of taxes paid). A close, statistically significant, and inverse relationship was revealed between the Sustainability Transparency Index of energy companies and indicators illustrating their competitiveness besides profitability. The results of rating and clustering companies according to SDG, CSR, and ESG criteria can be used to improve their positive and negative investment screening procedures and increase their competitiveness on the way to SDG 7.

Acknowledgment
Inna Makarenko gratefully acknowledges support from the Supreme Council of Ukraine (0122U201796).

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    • Figure 1. Study methodology of the sustainability transparency reporting of energy companies
    • Figure 2. Distribution of energy companies by type of sustainability reporting, 2021
    • Figure 3. Distribution of energy companies by frequency of SDGs mentioned in reporting, 2021
    • Table 1. Comparison of methodological approaches for assessing sustainability criteria disclosure by energy sector companies
    • Table 2. The interest of stakeholder groups in the competitiveness and tax payments of energy companies (loyalty) indicators
    • Table 3. Grouping of Ukrainian energy companies according to the Sustainability Transparency Index
    • Table 4. Shapiro-Wilk test for testing pairs of factor and outcome variables for the studied energy companies for the normality of distribution
    • Table 5. Spearman’s and Kendall’s rank correlation coefficients for the Sustainability Transparency Index of energy companies’ reporting and their competitiveness indicators
    • Table A1. Results of STI evaluation for the Ukrainian energy companies
    • Conceptualization
      Inna Makarenko, Zhanna Oleksich
    • Funding acquisition
      Inna Makarenko
    • Methodology
      Inna Makarenko, Pavlo Brin, Anargul Belgibayeva
    • Project administration
      Inna Makarenko, Zhanna Oleksich
    • Resources
      Inna Makarenko, Pavlo Brin, Anargul Belgibayeva, Zhanna Oleksich
    • Software
      Inna Makarenko
    • Supervision
      Inna Makarenko
    • Writing – review & editing
      Inna Makarenko, Zhanna Oleksich
    • Data curation
      Pavlo Brin, Anargul Belgibayeva, Igor Orlov
    • Formal Analysis
      Pavlo Brin, Anargul Belgibayeva, Igor Orlov
    • Investigation
      Pavlo Brin, Anargul Belgibayeva, Zhanna Oleksich
    • Validation
      Pavlo Brin, Anargul Belgibayeva, Igor Orlov
    • Visualization
      Pavlo Brin, Anargul Belgibayeva, Igor Orlov
    • Writing – original draft
      Pavlo Brin, Anargul Belgibayeva, Igor Orlov