<i>ESG</i> in the context of strategic business management

Abstract

Aim. The presented study aims to propose a conceptual approach to ESG reporting in company value management and to identify areas for further research regarding the methodological development of the introduction of environmental, social, and managerial factors into the overall system of strategic business management.Tasks. The author determines the level of influence of the ESG agenda on decision-making in capital markets by creating an overview of statistics, key theses in the information field, and relevant scientific research in the field of finance; determines the degree of methodological development of ESG factors in business management from the perspective of the requirements of the value management concept; describes algorithms used by the investment community to evaluate assets with allowance for ESG rankings and by company management to take into account ESG factors in managerial processes and transmission of signals to the external environment; formulates proposals for taking into account ESG data based on the latest developments in the field of strategic business management and tasks requiring methodological elaboration and further research.Methods. The key methods used in the study include analysis and synthesis, comparison, generalization, system analysis, induction and deduction.Results. It is found that the introduction of ESG factors into business management processes is underdeveloped methodologically by the scientific community and consulting companies against the backdrop of growing investor interest in ESG assets. The issue of making allowance for ESG factors in management remains open and requires further methodological development. An approach to considering ESG factors as drivers of the market value of assets is proposed, which is achievable using a modified approach to company value management based on expectations.Conclusions. Despite the growing interest in the ESG agenda in capital markets, methods for assessing and implementing ESG factors in companies' business processes are underdeveloped, and these factors are insufficiently justified in companies on a growing scale as a whole. On the one hand, considering the significant investment directed to ESG funds and the volume of capital investment of companies in ESG assets, the need to investigate ESG factors as potential drivers of value within the framework of cost management is determined, their role and significance are substantiated. On the other hand, the author believes that a modified approach to company value management based on expectations can already be used today to make allowance for ESG factors and take prompt measures to reduce the noise associated with significant observed variations in the estimates of the ESG status of companies operating in different regions and industries, as well as to implement algorithms for the interaction with the external environment in terms of expectations regarding ESG business performance.