Transparency of Responsible Investment Environment

Abstract

The study deals with measuring the investment environment transparency for responsible investment, assessing it in Ukraine, and improving it through the rating means in sustainable development. There are ratings, rankings, indices, benchmarks and sustainable development standards as unique markers in responsible investment markets, considering the ESG − criteria for screening companies. The authors prove that ratings are tools for minimizing information asymmetry at the micro and macro levels, which is quite significant, especially in the responsible investment field. Rating is a leading factor in creating a transparent environment for investment decisions and ensuring a favorable investment climate in the world (considering the sustainable development ratings and progress towards sustainable development) and the investment attractiveness of companies (considering ESG − reporting criteria on sustainable development of companies). The authors pay much attention to the world’s sustainable development ratings, which incorporate the transparency component of the investment environment. The authors analyze Ukraine’s position in these rankings and conclude that its status and investment attractiveness are deteriorating in the international arena, particularly due to insufficient transparency of the investment environment, perception of corporate social responsibility and weak progress towards the Sustainable Development Goals. Structural and dynamic analysis of the signatories and participants of the UN Global Compact network in Ukraine confirm this thesis. Despite the positive dynamics of network members, especially in recent years, their number and composition are unrepresentative towards companies, financial sector institutions, NGOs and government organizations as leaders in the values of sustainable development and social responsibility in Ukraine. Consideration of the European countries’ experience embodied in the new EU investment plan, comprising three areas and ten measures aimed at mobilizing 650 billion euros of investment in sustainable development and the investigations made by a supranational organizations network (OECD, UN Development Program, the Sustainability Accounting Standards Board). The Global Reporting Initiative, the International Finance Corporation, the Global Impact Investing Network, and other stakeholders are essential steps in increasing Ukraine’s investment environment transparency. Ensuring environment transparency of the responsible investment by introducing methods of ranking companies and countries considering their social responsibility and achievements in the sustainable development field and its goals, standardization of products, techniques and strategies of responsible investment are key priorities of Ukrainian state investment policy. Keywords: Transparency, Investment Environment, Information Asymmetry, Ranking, Sustainable Development, Responsible Investing.