Non-financial/sustainability reporting in the Ukraine

On behalf of the Global Compact network in Ukraine, CSR Ukraine Community reviewed the state of practice of non-financial reporting in the Ukraine. The study notes that non-financial disclosure emerged only about five years ago and highlights that, by May 2010:

  • 38 companies engaged in non‐financial reporting
  • 55 non‐financial reports in any form have been published
  • 47 UN Global Compact Communication on Progress have been published
  • 7 GRI‐compliant reports have been published by five companies
  • 3 reports have been verified by external auditors
  • 10% of top 100 companies engage in non‐financial reporting

The list of Ukrainian companies with “GRI-compliant” reports include the following:

System Capital Management : Diversified holding with over 100 companies under its control (including intermediate ownership) and interests in mining, metallurgy, electric power generation and distribution, banking, telecommunications, media and real estate;

Nadra Bank: Banking

DTEK:  Coal mining, electric power generation and distribution (owned by SCM – see above)

Obolon:  Beer and beverages production

Metinvest:  Mining, metallurgy (majority owned by SCM – see above)

The study highlights that “the majority of companies that report on their non‐financial performance have the Ukrainian capital and work only on the Ukrainian market. No large multinational company has produced a GRI‐compliant report for their Ukrainian operations, though many have a large presence in the country with significant financial and non‐financial impact.”  [If memory from my days at the European Bank serves, at least Obolon and Nadra Bank have received funding from the EBRD. However, EBRD's involvement was probably not the main driver of sustainability reporting.]

Although most reports cover topics such as working conditions, environmental protection and philanthropy, these were some of the interesting topics which were often not covered in the non-financial reports:

  • Fight against corruption – Corruption is a well‐recognized issue within Ukraine
  • Poverty – Ukraine is one the poorest European countries
  • Economic paternalism – Soviet traditions of providing social services provision remain deeply entrenched
  • Product responsibility – Ukraine faces acute problem of waste collection and treatment

You can access the full report here. Are you working in or with companies in the Ukraine? What do you think were main barriers and drivers of non-financial reporting in the Ukraine?