ESG principles: New rules for business and government

Any concerns that ESG (Environmental, Social and corporate Governance) was some kind of investor fad or fashion trend have now been removed. Even in the face of a severe global recession, the ESG criteria have proven that they will continue to have a major impact on businesses and society. We are responding to society’s call for the promotion of sustainable development in Ukraine, and for a sustainable recovery from the effects of the COVID-19 pandemic. Source KyivPost

DTEK is the first Ukrainian company to build its new strategy using ESG principles. Oleksandr Kucherenko, director of sustainable development at DTEK, provides insights into why and how DTEK has chosen to implement these principles.

What were the motivating factors behind the implementation of ESG principles at the strategic level and how could it impact on business development?

For DTEK, it has become very important to align our commitment to sustainability and social responsibility with the success of the company. Today, society expects more from businesses than simple profits. In fact, The World Economic Forum effectively says as much in its manifesto released in December 2019: “The purpose of a company is to engage all its stakeholders in shared and sustained value creation. In creating such value, a company serves not only its shareholders, but all its stakeholders – employees, customers, suppliers, local communities and society at large.”

Using DTEK as an example, I can say that we are implementing ambitious projects to further the development of Ukrainian energy. However, these projects are only viable through joint efforts and a level of trust between companies and employees, businesses and local communities, and enterprises and contractors. Each project entails the forging of different partnerships, which ultimately determine the sustainability credentials of the project.

In the new strategy, we will move from socially responsible projects to a firm commitment to alignment with the UN Sustainable Development Goals across the company. That is to say that we will remain committed to the principles of ESG, but in a broader context, strive to meet the interests of society. To achieve this objective we have adopted twelve of the United Nations Sustainable Development Goals and have committed ourselves to making progress in this regard.

What does the implementation of these principles mean for employees and regions where DTEK operates?

Our employees and the communities we serve are the backbone of the new strategy. Our 15 years of experience have taught us to listen to the needs and requests of employees and local communities in order to respond to their requests and support change. By doing so, we as a company mirror the innovation and change happening in our society. Take, for example, our Social Partnership Programs, or the Interregional Project “Your Hometown Begins with You.” They were created to meet the needs of local communities, improving the quality of life through the restoration of urban infrastructure. Another example can be found in Academy DTEK, which was founded as a corporate university more than 10 years ago. We saw that representatives from other businesses, the public sector and the general public desired a quality, yet specialized, education that we could offer. Today, Academy DTEK operates as an open educational platform which can be accessed by businesses, NGOs, and government employees.

Why is this so important in the context of Ukraine?

Large companies traditionally shape ‘business culture.’ They are the main drivers of corporate responsibility and, by way of example, show how this is implemented in practice. As a result, our commitment propels the entire business community forward with regards to the fulfillment of their responsibility to society.

The second important point: Ukraine has chosen to align itself in its development with the EU. This integration also directly impacts our business principles. ESG criteria are a value code that determine the level of maturity and social responsibility of a society, business and state. Today, the principles and approaches of ESG are the most important criteria for a successful partnership between Ukrainian businesses and our European counterparts. Over time, the criteria for responsible investment will play a leading role in the selection of partners, not only at the business level, but also at the state level.