UNIVERSITY OF LJUBLJANA SCHOOL OF ECONOMICS AND BUSINESS MASTER’S THESIS AN ANALYSIS OF SUSTAINABILITY DISCLOSURE IN UKRAINIAN COMPANIES Ljubljana, May 2020 ALINA TERSKYKH AUTHORSHIP STATEMENT The undersigned Alina Terskykh, a student at the University of Ljubljana, School of Business and Economics, (hereafter: SBE LU), author of this written final work of studies with the title An Analysis of Sustainability Disclosure in Ukrainian Companies, prepared under supervision of Full Prof. Dr. Adriana Rejc Buhovac DECLARE 1. this written final work of studies to be based on the results of my own research; 2. the printed form of this written final work of studies to be identical to its electronic form; 3. the text of this written final work of studies to be language-edited and technically in adherence with the SEB LU’s Technical Guidelines for Written Works, which means that I cited and / or quoted works and opinions of other authors in this written final work of studies in accordance with the SEB LU’s Technical Guidelines for Written Works; 4. to be aware of the fact that plagiarism (in written or graphical form) is a criminal offence and can be prosecuted in accordance with the Criminal Code of the Republic of Slovenia; 5. to be aware of the consequences a proven plagiarism charge based on the this written final work could have for my status at the SEB LU in accordance with the relevant SEB LU Rules; 6. to have obtained all the necessary permits to use the data and works of other authors which are (in written or graphical form) referred to in this written final work of studies and to have clearly marked them; 7. to have acted in accordance with ethical principles during the preparation of this written final work of studies and to have, where necessary, obtained permission of the Ethics Committee; 8. my consent to use the electronic form of this written final work of studies for the detection of content similarity with other written works, using similarity detection software that is connected with the SEB LU Study Information System; 9. to transfer to the University of Ljubljana free of charge, non-exclusively, geographically and time-wise unlimited the right of saving this written final work of studies in the electronic form, the right of its reproduction, as well as the right of making this written final work of studies available to the public on the World Wide Web via the Repository of the University of Ljubljana; 10. my consent to publication of my personal data that are included in this written final work of studies and in this declaration, when this written final work of studies is published. Ljubljana, May 26th, 2020 Author’s signature: _________________________ TABLE OF CONTENTS INTRODUCTION ........................................................................................................... 1 1 CORPORATE SOCIAL DISCLOSURES THROUGH SUSTAINABILITY REPORTING ................................................................................................................... 3 1.1 Definitions and core ideas .................................................................................. 3 1.2 Motivation for sustainability disclosure ............................................................ 9 2 EMPIRICAL FINDINGS ON SUSTAINABILITY DISCLOSURE .................... 10 2.1 Sustainability disclosure in Western Europe .................................................. 11 2.2 Sustainability disclosure in CEE ..................................................................... 13 2.3 Sustainability disclosure in Ukraine ............................................................... 15 3 COMPARATIVE STUDY ON SUSTAINABILITY REPORTING IN UKRAINE ................................................................................................................................. 18 3.1 Research method.............................................................................................. 18 3.2 Research process .............................................................................................. 19 3.3 Findings ............................................................................................................ 22 3.3.1 Sustainability Reporting Form .................................................................. 24 3.3.2 Language Used ......................................................................................... 25 3.3.3 Reporting Standards.................................................................................. 26 3.3.4 Focus of Reports ....................................................................................... 27 4 DISCUSSION.......................................................................................................... 42 4.1 Recommendations for managers ..................................................................... 42 4.2 Main contribution ............................................................................................ 43 4.3 Research limitations ........................................................................................ 44 CONCLUSION .............................................................................................................. 44 REFERENCE LIST ....................................................................................................... 46 APPENDIXES ................................................................................................................ 54 LIST OF FIGURES Figure 1: The Pyramid of Corporate Social Responsibility ................................................. 4 i Figure 2: Triple Bottom Line ............................................................................................. 5 Figure 3: The Set of GRI Standards ................................................................................... 7 Figure 4: Research Process for the Thesis ........................................................................ 19 Figure 5: Final List of Sampled Ukrainian Companies ..................................................... 23 Figure 6: Percentage of Sustainability Disclosure in Each Sustainability Category .......... 30 LIST OF TABLES Table 1: The Ten Principles of the United Nations Global Compact .................................. 8 Table 2: List of Empirical Studies on Sustainability Disclosure in Western Europe ......... 11 Table 3: List of Empirical Studies on Sustainability Disclosure in Central and Eastern Europe ........................................................................................................................................ 13 Table 4: List of Empirical Studies on Sustainability Disclosure in Ukraine ...................... 17 Table 5: Coding Scheme .................................................................................................. 21 Table 6: Sustainability Reporting Form Used Among Sampled Companies ..................... 24 Table 7: Language Used for Reports of Sampled Companies ........................................... 26 Table 8: Reporting Standards in Reports of Sampled Companies ..................................... 27 Table 9: Length of Reports of Sampled Companies (in Pages) ......................................... 28 Table 10: Top Sustainability Issues Across Ten Ukrainian Companies in 2012/2013 ....... 31 Table 11: Top Sustainability Issues Across Ten Ukrainian Companies in 2017 ................ 32 Table 12: Quality of Disclosure of Individual Sustainability Issues in Ten Ukrainian Companies in 2012/2013 ................................................................................................. 34 Table 13: Quality of Disclosure of Individual Sustainability Issues in Ten Ukrainian Companies in in 2017 ...................................................................................................... 36 Table 14: Rank of Ten Ukrainian Companies Based on Their Overall Sustainability Disclosure in 2012/2013 .................................................................................................. 39 Table 15: Rank of Ten Ukrainian Companies Based on Their Overall Sustainability Disclosure in 2017 ........................................................................................................... 40 LIST OF APPENDIXES Appendix 1: Povzetek (Summary in Slovene language) ..................................................... 1 Appendix 2: List of Companies Used for the Research ...................................................... 2 ii Appendix 3: Content Analysis for the Year 2012/2013....................................................... 8 Appendix 4: Content Analysis for the Year 2017 ............................................................. 13 LIST OF ABBREVIATIONS CEE – Central and Eastern Europe CSR – Corporate Social Responsibility EU – European Union GDP – Gross Domestic Product GRI – Global Reporting Initiative NGO – Non-Governmental Organisation SDG – Sustainable Development Goal SR – Sustainability Reporting TBL – Triple Bottom Line UK – United Kingdom UNGC – United Nations Global Compact WCED – World Commission on Environment and Development WE – Western Europe iii INTRODUCTION In the last twenty years, businesses have moved towards incorporating sustainability ideas and the concept of corporate social responsibility (hereinafter: CSR) in their day-to-day operating activities. The phenomenon of globalisation made the organisations become more aware of their impacts upon society and moving managers’ mind-sets beyond financial profits. Organisations started shaping progressive social