Our paper focuses on the critical roles of environmental management and non-financial reporting in supporting sustainable economic development, specifically focusing on the adoption and effectiveness of environmental, social, and governance (ESG) practices among small and medium-sized enterprises (SMEs). Utilizing data from 250 SMEs across seven Russian regions, the empirical model identifies significant determinants influencing ESG adoption, including managerial qualifications, company size, market access, financial resources, and governmental support. The study discusses various frameworks for non-financial reporting, emphasizing their ability to enhance corporate value, reputation, and stakeholder trust through transparency and accountability. Special emphasis is given to the ESG data book as a key instrument in improving the consistency and credibility of non-financial disclosures. Furthermore, the paper addresses critical issues of materiality and stakeholder expectations, highlighting their importance for reliable ESG reporting. Our results stress the urgent need for harmonized international ESG reporting standards, mandatory third-party verification, streamlined regulatory frameworks, targeted financial incentives, and digital innovations in reporting practices. The novelty of this study lies in its focus on the underexplored context of Russian SMEs, combining environmental management and non-financial reporting practices with a unique empirical investigation. The research aims to identify key determinants of ESG adoption and reporting efficacy, thereby filling the gap in current literature that largely overlooks smaller enterprises in emerging economies.
Striełkowski et al. (Fri,) studied this question.