The role of ESG indices in shaping companies’ sustainable development strategies

Abstract

In the current context of increasing demands for transparency, accountability, and sustainability in business, the integration of ESG (Environmental, Social, and Governance) approaches into strategic management has become a key factor in ensuring companies’ competitiveness. The study aims to explore the potential of ESG rating indicators in transforming corporate sustainability management approaches and to establish a conceptual foundation for internal non-financial reporting that addresses the challenges of transparency, risk management, and compliance. Methods. The study employs a systems and interdisciplinary approach, incorporating comparative analysis of ESG rating agencies (MSCI, Sustainalytics, Refinitiv), logical-semantic modeling of ESG parameters based on the concept of double materiality, graphical visualization of discrepancies between ratings, and synthesis of scientific approaches to standardizing non-financial reporting. Results. Significant discrepancies were identified in the approaches of various ESG agencies to evaluating the same companies, which complicates the use of such indices as unambiguous benchmarks for strategic decision-making. It was demonstrated that ESG rating levels not only influence a company’s market capitalization and value but also signal the effectiveness of sustainable risk management. The feasibility of developing internal ESG reporting based on an adapted ESG Materiality Matrix (Refinitiv) was substantiated, taking into account industry specificity, stakeholder expectations, and financial indicators. A structural model of internal ESG reporting is identified as a tool for managing campaign sustainability and compliance with regulatory requirements.  Conclusions. The proposed approach addresses the fragmentation of ESG evaluation by unifying assessment parameters and establishing an internal ESG monitoring system that focuses on strategic management, institutional compliance, and reporting. The practical value of the results lies in forming a methodological basis for harmonizing external ESG ratings with internal governance procedures in the field of corporate sustainability.