Methodological approach to economic analysis of agribusiness organizations based on ESG principles

The purpose of the study is to provide recommendations for developing a methodology for economic analysis of agricultural organizations based on ESG principles. The author applies general scientific approaches, including dialectics, methods of institutional analysis, general theoretical methods of analysis, synthesis, grouping, classification. The information and empirical base of the study rests upon the norms and standards in the field of integrated and non-financial reporting, the OECD-FAO Guidelines on Responsible Supply Chains in Agriculture, policy documents on the development of agro-industrial complex of the Russian Federation, reports of Russian agro-industrial complex organizations for 2020-2022 (RUIE, National Register), disclosing ESG indicators of their activities. As a result of the study, the conclusions confirm that unification of methodological approaches to economic analysis and the development of industry practices for the ESG formation metrics is required; there is a need to adapt domestic accounting and analytical system of agro-industrial complex organizations to ESG needs. The author proposes a methodological approach to economic analysis based on ESG principles, including clarification of the paradigm, addition of principles, methods of analysis, and offers a system of specific, sectoral indicators form non-financial reporting of agro-industrial complex organizations. The scientific novelty of the study lies in the development of a methodology for industry analysis for the purpose of managing sustainable development and forming non-financial reporting of agro-industrial complex organizations that have significant sustainable development potential and specific performance indicators. The implementation of the findings will make it possible to adapt the ESG metrics system, ideas about the disclosure of non-financial information to the needs of various institutions and improve the quality of management decisions in the field of sustainable development of agro-industrial complex organizations.

1. Arkhipova, I., Proskuryakova, L., Leshukov, O., Anikin, V., Makarov, I., Makeeva, E., Cheglakova, L., Ivanova, E., Sutyrina, A., Tyulkina, Yu., Soloviev, I., & Liberman, V. HSE. (2023, April 17). Strategic project “Social policy of sustainable development and inclusive economic growth”. https://stratpro.hse.ru/social-policy/news/828220184.html

2. Babanskaya, A. S. & Kolomeeva, E. S. (2022). Comparative analysis of the effi ciency of crop production organizations taking into account environmental characteristics. Agricultural Economics of Russia, 9, 16−24. https://doi.org/10.32651/229-16

3. Bank of Russia. (2023).Model Methodology of ESG Ratings. Report for Public Consultations. http://www.cbr.ru/Content/Document/File/144085/Consultation_Paper_17012023.pdf

4. Bulyga, R. P., Melnik, M. V., Safonova, I. V. & Gisin, V. B. (2023). Model of the ESG Transparency Index of Corporate Reporting. Bulletin of MGIMO-University, 16(3), 56−80. https://doi.org/10.24833/2071-8160-2023-3-90-56-80

5. Gerasimova, E. B. (2016). New Direction of Economic Analysis: Business Analysis. Finance: Theory and Practice, 3. https://cyberleninka.ru/article/n/novoe-napravlenieekonomicheskogo-analiza-biznes-analiz

6. Grigoryeva, S. V. (2023). Development of the methodology of economic analysis of enterprise sustainability. Economic Sciences, 3(220), 10−18. https://doi.org/10.14451/1.220.9

7. Guzey, V. A. (2022). Theoretical, methodological and target settings of the system of analysis of sustainable development of an organization. Economic and Humanitarian Sciences, 3 (362), 39−47. https://doi.org/10.18334/social.4.2.117028

8. Efi mova, O. V., Volkov, M. A. & Koroleva, D. A. (2021). Analysis of the Impact of ESG Principles on Asset Returns: An Empirical Study. Finance: Theory and Practice, 25(4), 82−97. https://doi.org/10.26794/2587-5671-2021-25-4-82-97

9. Kogdenko, V. & Melnik, M. (2014). Integrated Reporting: Formation and Analysis Issues. International Accounting, 10, 2−15.

10. Kolomeeva, E. S., Tikunova, A. S., Babanskaya, A. S. & Minaeva, V. M. (2022). The concept of development of environmentally responsible organizations of the agroindustrial complex. Economics of agricultural and processing enterprises, 12, 25−34. https://doi.org/10.31442/0235-2494-2022-0-12-25-34

11. OECD/FAO. (2016). OECD-FAO Guidelines for Responsible Agricultural Value Chains. OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264251052-en

12. Order of the Government of the Russian Federation. (2017). On approval of the Concept for the development of public non-financial reporting and the action plan for the implementation of the Concept for the development of public non-financial reporting (No. 876-r). Moscow, Russia.

13. Official Internet portal of legal information. https://docs.cntd.ru/document/456064017

14. Rezvanov, R. I. (2022). The Doctrine of Food Security (2020) and ESG transformation of agriculture and the agro-industrial complex of Russia. Proceedings of the International Banking Institute. http://dx.doi.org/10.2139/ssrn.4458210.

15. RSPP. (n.d.). National Register and Library of Corporate Non-Financial Reports. https://rspp.ru/sustainable_development/registr/

16. SberPro PAO Sberbank. (2021, September 28). ESG transformation: how will it take place in the agro-industrial complex? https://sber.pro/publication/esg-transformatsiia-kak-onabudet-proiskhodit-v-agropromyshlennom-komplekse

17. Shagayda, N. I., Uzun, V. Ya., Gataulina, E. A. & Shishkina, E. A. (2020). Assessment of the State of Food Security in the Russian Federation. Institute of Applied Economic Research, RANEPA. http://dx.doi.org/10.2139/ssrn.3874900

18. Smirnov, V. D. (2020). ESG risk management in commercial organizations. Management Sciences in Russia, 10(3), 6−20. https://doi.org/10.26794/2404-022X-2020-10-3-6-20

19. Strategy Partners. (2022). Approaches to ESG transformation in the agricultural and food industries. https://strategy.ru/research/expert/56

20. Suits, V., Khorin, A. & Sherement, A. (2020). Comprehensive analysis and audit of integrated reporting on the sustainable development of companies. M.: INFRA-M. https://doi.org/10.12737/1072676

21. Turbina, K. E. & Yurgens, I. Yu. (2022). ESG transformation as a vector of sustainable development: In 3 vol. Vol. 1. Aspect Press. https://mgimo.ru/upload/2022/10/esgtransformatsiya-kak-vektor-ustoychivogo-razvitiya-tom1.pdf?utm_source=google.com&utm_medium=organic&utm_campaign=google.com&utm_referrer=google.com

22. Zaitsev, A. G. & Khapilina, S. I. (2022). Prospects for the Development of the ESG Concept in the AIC Context. Bulletin of OrelSAU, 2(95), 120−125. https://doi.org/10.17238/issn2587666X.2022.2.120

23. Adams, C. (2017). Conceptualising the contemporary corporate value creation process. Accounting Auditing and Accountability Journal, 30(4), 906−931. https://doi.org/10.1108/AAAJ-04-2016-2529

24. Aray, Y., Dikova, D., Garanina, T. & Veselova, A. (2021). The hunt for international legitimacy: examining the relationship between internationalization, state ownership, location and CSR reporting of Russian fi rms. International Business Review, 101858. https://doi.org/10.1016/j.ibusrev.2021.101858

25. Aray, Y., Veselova, A., Knatko, D. & Levchenko, A. (2020). Drivers for adoption of sustainability initiatives in supply chains of large Russian fi rms under environmental uncertainty. Corporate Governance (Bingley), 21(2), 322−338. https://doi.org/10.1108/CG-02-2020-0048

26. Clark, G. L., Feiner, A. & Viehs, M. (2015). From the stockholder to the stakeholder: How sustainability can drive fi nancial outperformance. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2508281

27. Financial Services Agency. (2022). Report of the Technical Committee for ESG Evaluation and Data Providers. Retrieved January 27, 2024, from https://www.fsa.go.jp/en/news/2022/20220712-1.html

28. Jo, H. & Na, H. (2012). Does CSR reduce fi rm risk? Evidence from controversial industry sectors. Journal of Business Ethics, 110(4), 441−456. http://dx.doi.org/10.1007/s10551-0121492-2

29. Hong, B., Li, Z. & Minor, D. (2016). Corporate governance and executive compensation for corporate social responsibility. Journal of Business Ethics, 136, 1, 199−213. http://dx.doi.org/10.1007/s10551-015-2962-0

30. GSSB. (2016). GRI 101: FOUNDATION 2016. https://growthorientedsustainableentrepreneurship.files.wordpress.com/2017/12/csr-gri-101-foundation-2016.pdf

31. Melas, D., Nagy, Z. & Kulkarni, P. (2017, November). Factor investing and ESG integration. MSCI. https://d8g8t13e9vf2o.cloudfront.net/Uploads/a/a/h/Factor-Investingand-ESG-Integration.pdf

32. Porter, M. & Kramer, M. (2006). Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility. Harvard Business Review (р. 78−92. Brighton: Harvard Business Publishing, USA. https://hazrevista.org/wp-content/uploads/strategysociety.pdf

33. PRI Association. Principles for Responsible Investment. https://www.unpri.org/about-us/about-the-pri

34. Sustainability Accounting Standards Board (SASB) (2018). SASB Standards. https://www.sasb.org/

35. Tamimi, N. & Sebastianelli, R. (2017). Transparency among S&P 500 companies: an analysis of ESG disclosure scores. Management Decision, 55, 8, 1660−1680. http://dx.doi.org/10.1108/MD-01-2017-0018

36. Telegina, Z. A. & et al. (2022). Directions and prospects of sustainable development of the national accounting and analytical system of agricultural formations. IOP Conference Series: Earth and Environmental Science.«International Scientific and Practical Conference: Development of the Agro-Industrial Complex in the Context of Robotization and Digitalization of Production in Russia and Abroad, DAICRA 2021, 012002. https://doi.org/10.1088/17551315/949/1/012002

37. United Nations. (n.d.). Sustainable Development Agenda. https://www.un.org/sustainabledevelopment/ru/about/development-agenda/