Promoting the ESG agenda for small and medium-sized businesses in the Republic of Kazakhstan in the context of sustainable development

Small and medium enterprises (SMEs) in Kazakhstan can become a system-forming factor in economic diversification in the context of ESG development. Responsible business requires the responsible attitude of business entities in all those affected by its activities. The introduction of ESG principles into the activities of S&MSB will ensure long-term profitability, improve the image of organizations, and ensure both the sustainability of the company itself and the sustainability of the development of a socio-economic system of a higher order. The formation and implementation of public non-financial indicators for business entities will make it possible to intensify efforts to promote the ESG agenda in transformative business conditions. The goal is to study the problems of promoting the ESG agenda for SMEs in the Republic of Kazakhstan and systematize non-financial indicators that promote responsible business conduct. Research methods - deconstruction, analysis, synthesis, description, comparison, survey. Conclusions are drawn about the need for legislative regulation, the formation of non-financial reporting, and the use of tax incentives for those business entities that follow ESG principles. Legislative regulation is aimed at creating publicity and openness in the presentation of non-financial reporting data. Criteria for monitoring non-financial reporting are proposed, covering the environmental, social, and managerial profile of the entrepreneur. The results obtained can be used by SMEs, higher education, the public, and government authorities.

1. Bjuro nacional'noj statistiki Agentstva po strategicheskomu planirovaniju i reformam Respubliki Kazahstan. URL: https://stat.gov.kz/ruhttps://stat.gov.kz/ru (data obrashhenija: 02.09.2024). (In Russian).

2. Whelan T., Atz U., Clark C. ESG and financial performance: Uncovering the relationship by aggregating evidence from 1,000 plus studies published between 2015–2020. URL: https://www.stern.nyu.edu/sites/default/files/assets/documents/ESG%20Paper%20Aug%202021.pdf (accessed: 25.01.2024). (In English).

3. Dellaportas S., Langton J., West B. (2012) Governance and account-ability in Australian charitable organisations: Perceptions from CFOs // International Journal of Accounting and Information Management. Vol. 20. No 3. pp. 238–254. (In English).

4. McKinsey & Company. Five ways that ESG creates value. URL: https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/five-ways-that-esg-creates-value (accessed: 26.05.2024). (In English).

5. ESG dlja malogo i srednego biznesa: objazatel'stvo, opcija ili vozmozhnost'? URL: https://www.zakon.kz/ekonomika-biznes/6401861-ESG-dlya-malogo-i-srednego-biznesa-obyazatelstvo-optsiya-ili-vozmozhnost.html (data obrashhenija: 17.05.2024). (In English).

6. Lee Brown D., Guidry R.P., Patten D.M. (2009) Sustainability reporting and perceptions of corporate reputation: An analysis using fortune. In Sustainability, Environmental Performance and Disclosures; Emerald Group Publishing Limited: Bingley, UK. Volume 4. P. 83–104. (In English).

7. Shalhoob H., Hussainey K. (2023) Environmental, Social and Governance (ESG) Disclosure and the Small and Medium Enterprises (SMEs) Sustainability Performance // Sustainability, no. 15, p. 200. URL: https://doi.org/10.3390/su15010200. (In English).

8. Ren S., Wei W., Sun H., Xu Q., Hu Y., Chen X. (2020) Can mandatory environmental information disclosure achieve a win-win for a firm’s environmental and economic performance? // J. Clean. Prod. , no. 250, pp. 119. (In English).

9. Gjergji R., Vena L., Sciascia S., Cortesi A. (2020) The effects of environmental, social and governance disclosure on the cost of capital in small and medium enterprises: The role of family business status // Bus. Strategy Environ, no. 30, pp. 683–693. (In English).

10. Hu M.K., Kee D.M.H. (2022) Global institutions and ESG integration to accelerate SME development and sustainability // Handbook of Research on Global Institutional Roles for Inclusive Development; IGI Global: Hershey, PA, USA. P. 139–156. (In English).

11. Issledovanie: chto malyj i srednij biznes v Rossii znaet pro ustojchivoe razvitie. URL: https://www.forbes.ru/forbeslife/491162-issledovanie-cto-malyj-i-srednij-biznes-v-rossii-znaet-pro-ustojcivoe-razvitie (data obrashhenija: 16.05.2024). (In Russian).

12. ESG Score Methodology. URL: https://assets.ctfassets.net/03fbs7oah13w/5hWQ7R44kPRUDKNH16kBRx/6d14d4655f484cf5bd361558afea06bc/SUF_ESG_Score_Methodology_2022-06.pdf (accessed: 26.05.2024). (In English).

13. EU Taxonomy Reporting: Incorrect Use of NACE Codes Can Lead to Greenwashing. URL: https://clarity.ai/research-and-insights/regulatory-compliance/using-nace-code-comparison-to-avoid-greenwashing (accessed: 17.06.2024). (In English).

14. Fitch Ratings Limited. URL: https://www.fitchratings.com/research/ru/banks/fitch-group-announces-creation-of-sustainable-fitch-launches-esg-ratings-products-15-09-2021 (accessed: 17.06.2024). (In English).

15. Kodeks Respubliki Kazahstan «O nalogah i drugih objazatel'nyh platezhah v bjudzhet» (Nalogovyj kodeks) (s izmenenijami i dopolnenijami po sostojaniju na 02.01.2024 g.). URL: https://online.zakon.kz/Document/?doc_id=36148637 (data obrashhenija: 17.06.2024). (In Russian).

16. Razvivaetsja li ESG-povestka v Kazahstane? URL: https://kapital.kz/business/122677/razvivayet-sya-li-esg-povestka-v-kazakhstane.html (data obrashhenija: 17.06.2024). (In Russian).

17. Wang C., Pengyu C., Hao Y., Dagestani A.A. (2022) Tax incentives and green innovation – The mediating role of financing constraints and the moderating role of subsidies // Frontiers in Environmental Science, no. 10, pp. 225–229. (In English).