New Rules of the Game: Experts Discussed Implementation of ESG Reporting for Ukrainian Companies

On March 10, 2025, a public discussion of the National Strategy for Sustainability Reporting took place — a document that defines the future of Ukrainian business in the context of global environmental and social challenges. Leading experts in ESG transformation, representatives of regulatory bodies, and the business community gathered to discuss this important topic. Participants reviewed the roadmap for implementing ESG reporting in Ukraine. This step is necessary to increase the competitiveness of Ukrainian businesses in the international arena.

Oleksiy Yatsiuk, an ESG expert from the Green Transition Office at the Ministry of Economy of Ukraine, presented an analysis of European standards and trends in ESG reporting regulation.

“ESG regulation legislation is very complex and voluminous. The EU has already developed 140 directives, and 40 more are in the development process. The most significant for us is the CSRD regulation, which defines requirements for sustainability reporting. Now, after the Omnibus package of changes, the main criterion for covering companies with ESG reporting has become the number of employees — more than 1000, which will reduce the number of companies subject to these requirements by 80%”, – Oleksiy Yatsiuk noted, providing specific data.

The expert examined in detail the changes taking place in European legislation, in particular the package of regulatory simplifications in the field of EU sustainable development (Omnibus), presented by the European Commission on February 26, 2025. Among the key changes are adjustments to company coverage criteria (mandatory reporting for companies with more than 1000 employees), simplification of standards, and postponement of implementation deadlines for some business categories. The first results of a study on the readiness of Ukrainian businesses for ESG reporting were also presented.

“We asked business opinions about what would help them implement these requirements. The number one factor turned out to be improving the qualifications of existing personnel, training in this direction, and the ability to hire these people from the market. Indeed, this is a big problem”, – Yatsyuk emphasized.

The government’s approach to implementing ESG reporting was presented by Lyudmila Haponenko, Director of the Department of Accounting Methodology and Regulatory Support for Auditing Activities at the Ministry of Finance of Ukraine.

“The Ukrainian strategy for implementing sustainability reporting is synchronized with European legislation. It states goals for the implementation of mandatory sustainability reporting in the country. To support this strategy, an operational plan has been developed, and draft legislative changes have already been created”, – Haponenko explained, detailing the practical steps of the Ministry of Finance of Ukraine.

She emphasized that the strategy for implementing sustainability reporting in Ukraine provides for synchronization with European legislation. Draft legislative changes have already been developed, which provide for the gradual implementation of mandatory ESG reporting for businesses.

“Reform not for reform’s sake, reporting not for reporting’s sake. Business should feel that it will get preferences from this”, – remarked Lyudmila Haponenko.

According to her, an important step will be the creation of an interdepartmental working group under the Ministry of Finance. It will include representatives of regulators who form indicators, representatives of business, and professional organizations.

An important element of implementing ESG reporting is its audit and verification. Oleksandr Suvorov, Deputy Executive Director of the Quality Assurance Inspection of the Public Audit Oversight Body, spoke about the draft law on auditing activities, which provides for the verification of sustainability reporting.

“The reliability of sustainability reporting must be confirmed by a party independent of the business entity — an audit firm. For the confirmation process and its result to be of high quality, such audit firms must be guided by certain professional standards”, – Suvorov emphasized.

According to him, the draft law provides for the creation of a separate section of the register of audit entities that will have the right to provide sustainability reporting. The basis of this register will be audit firms that currently have the right to perform mandatory audits of financial statements of public interest enterprises.

“In order to become a sustainability auditor, such a person, in addition to passing an exam, must acquire practical skills through either internship or employment in an appropriate firm that provides similar services”, – Suvorov explained.

The banking sector plays a special role in implementing ESG principles. Kateryna Rozhkova, First Deputy Governor of the National Bank of Ukraine, spoke about the role of banks in promoting ESG principles in the economy.

“Banks are intermediaries by and large, and therefore, on the one hand, their activities are not so strongly associated with negative consequences for the environment. On the other hand, by working with clients, providing loans to clients, banks can indeed influence their behavior”, – Rozhkova noted.

The National Bank has developed an action plan for implementing ESG principles in the banking system, which includes several stages: creating a unified glossary, developing a “white book” for the banking sector, and unifying requirements for clients.

“Our task is to unify the requirements for reporting that banks require from clients when considering loan applications. We even talked with banks about developing such a template-hint for the client to make it easier for the client to fill in all the necessary fields and parameters”, – shared the NBU representative.

Andriy Hrys, Head of Environmental and Social Risks Department at Ukrgasbank and Chair of the ESG Subcommittee of the Independent Association of Banks of Ukraine, shared practical experience in implementing ESG criteria in banking.

“Ukrgasbank has criteria for sustainable banking, according to which we classify projects by their level of sustainability. Such classification exists in other domestic banks as well as those with foreign investments, but at the national level, there is no such criterion yet”, – Hrys noted.

Andriy also noted that currently, in connection with the Strategy for implementing sustainability reporting by enterprises adopted by the Government of Ukraine, banks face the following priority tasks:

1. Bringing the bank’s operational activities and credit process in line with ESG criteria to be able to report on environmental, social, and governance activities.
2. Having a separate ESG specialist in the bank’s team.
3. Each bank should already be thinking about creating a Sustainability Strategy and Policy based on ESG principles. Banks also need to establish their long-term goals and priorities, and first of all, conduct a double materiality assessment — a concept that takes into account the two-way impact of ESG factors.
4. All of the above involves implementing an ESG risk assessment system in the bank, plus mandatory consideration of climate risks.

Thus, the banking sector is already taking concrete steps to integrate ESG principles into its activities but needs a systematic approach and unified standards at the national level.

At the same time, the implementation of ESG reporting raises a number of practical questions for businesses regarding readiness for these changes and the availability of appropriate specialists.

These aspects were raised by Olga Kulyk, Director of the Department of Ecology and Green Economy of the Federation of Employers of Ukraine, who shared the results of a business survey on readiness to implement ESG standards.

For a complete understanding of the situation, it is important to consider the perspective of business and its readiness for ESG transformation. Olga Kulyk, Director of the Department of Ecology, Energy, and Green Economy of the Federation of Employers of Ukraine, shared the results of a business survey on readiness to implement ESG standards.

“If we ask businesses whether they have defined their own sustainable development goals, only about 20% answer this question affirmatively”, – Kulyk reported.

According to her, the main challenges for businesses are insufficient awareness and lack of human resources:

“Sustainable development issues are ‘passed on’ to ecologists. And considering that reporting or preparing sustainability reports is generally a very complex issue, it would be wrong to say that it should be exclusively an accountant, exclusively an ecologist, or exclusively HR. Effective implementation of sustainable development goals in companies is possible only if the company’s management and all its employees are interested”, – she emphasized.

The Federation of Employers of Ukraine has already begun work on preparing businesses for ESG reporting, creating the FEU Climate Platform and developing online courses and training for companies.

The historical context and international experience in implementing ESG principles were presented by Tetyana Sakharuk, CEO of the UN Global Compact in Ukraine, Chair of the Council of Regional Networks of the UN Global Compact in Eastern Europe and Central Asia.

“The term ESG (Environmental, Social, Governance) first appeared in 2004 in the UN report ‘Who Cares Wins’ by the UN Global Compact. Today, 90% of S&P 500 companies have ESG strategies, which confirms the growing importance of these factors for the investment attractiveness of businesses”, – noted Tetyana Sakharuk.

The UN Global Compact in Ukraine conducts acceleration programs for businesses in various areas of ESG: “For four years, we have been teaching companies to set science-based carbon emission reduction targets. Last year, we joined the global program — the Business and Human Rights Accelerator — for the first time. And this year, we will be working on an anti-corruption program for businesses,” shared the CEO of the Ukrainian network of the UN Global Compact.

Summarizing the discussion, participants agreed on the need for gradual and systematic implementation of ESG reporting in Ukraine, taking into account the specifics of Ukrainian business and the state of war. Key areas of work identified include: synchronization of Ukrainian legislation with European requirements, development of methodological recommendations and training programs for businesses, preparation of specialists in ESG reporting and auditing, creation of a verification system for ESG reporting, as well as unification of reporting requirements from various regulators.

In the near future, the Ministry of Finance plans to create an interdepartmental working group on the implementation of ESG reporting, as well as develop an operational plan for implementing the national Strategy for Sustainability Reporting. The implementation of ESG standards will be an important step on Ukraine’s path to the European Union and will increase the competitiveness of Ukrainian businesses in international markets.

The Green Transition Office is an independent advisory body under the Ministry of Economy of Ukraine that helps to implement reforms in the field of green transition, energy and climate policy of Ukraine. The Green Transition Office operates with the financial support of the UK International Development and is implemented by Dixi Group.