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Transparency of agriculture companies: rationale of responsible investment for better decision making under sustainability

Author

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  • Makarenko, Inna
  • Plastun, Alex
  • Mazancovа, Jana
  • Juhaszova, Zuzana
  • Brin, Pavlo

Abstract

Purpose. The purpose of the article – to explore transparency under sustainability among agricultural companies in Ukraine (company “Kernel”) and the Czech Republic (company “Agrofert”) with further recommendations and implications related to reporting. Methodology / approach. Qualitative estimations of sustainability transparency are based on Sustainability Transparency Index (STI) calculations. Methodology of this index is based on binary estimations of a number of transparency criterions including links to sustainability information; existence of sustainable development policy; availability of sustainability and SDG reports; disclosure according to ESG criteria and specifics SDGs as well as other relevant goals related to SDG and sustainable development. Results. Sustainability transparency from 2016 till 2019 in Agrofert and Kernel was almost the same. But since 2019 after Kernel introduced a number of steps to increase its transparency the situation has changed dramatically. STI index has increased from 32 in 2019 to 80 in 2021. STI values for Agrofert were unchanged in 2020 (the latest available period of analysis). As a result, Kernel’s financial results and indicators have demonstrated significant improvement both absolute and relative. For example, net profit increased by more than 1000 %, investment cash-flow by 100 %, ROE – by 500 % and ROIC by 140 %. Originality / scientific novelty. New empirical results based on qualitative estimations of sustainability transparency for the agriculture companies from different countries are provided. Current study covers the existing research gap, proved by bibliometric analysis tool, for instance in pure academic discussion in measurement, comparison and benchmarking of agricultural companies’ transparency for the responsible investment purpose. Recommendations for sustainability transparency improvement are proposed. They are intended on better perception of sustainability ideology and incorporation of ESG/SDG criterion by agriculture companies in Ukraine and especially Czech Republic, levelling the informational asymmetry and moral risks for their investors and create better investment rationale for decision making under sustainability. Practical value / implications. The most efficient steps include the following ones: development and implementation of sustainability policy; emergence of specific reports based on ESG criteria; implementation of SDGs in activity of the company with further prioritization of these criteria within two groups. Further study in this field might be devoted to sustainability transparency comparison for agriculture companies in different branch in Ukraine and Czech Republic. Spreading the scope and sample of research allows making cross-industries STI benchmarking analysis.

Suggested Citation

  • Makarenko, Inna & Plastun, Alex & Mazancovа, Jana & Juhaszova, Zuzana & Brin, Pavlo, 2022. "Transparency of agriculture companies: rationale of responsible investment for better decision making under sustainability," Agricultural and Resource Economics: International Scientific E-Journal, Agricultural and Resource Economics: International Scientific E-Journal, vol. 8(2), June.
    • Handle: RePEc:ags:areint:322720
    DOI: 10.22004/ag.econ.322720
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    References listed on IDEAS

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    1. Johanna Gisladottir & Sigurbjörg Sigurgeirsdottir & Kristín Vala Ragnarsdóttir & Ingrid Stjernquist, 2021. "Economies of Scale and Perceived Corruption in Natural Resource Management: A Comparative Study between Ukraine, Romania, and Iceland," Sustainability, MDPI, vol. 13(13), pages 1-26, June.
    2. Kristoffer Francisco & David Swanson, 2018. "The Supply Chain Has No Clothes: Technology Adoption of Blockchain for Supply Chain Transparency," Logistics, MDPI, vol. 2(1), pages 1-13, January.
    3. Gardner, T.A. & Benzie, M. & Börner, J. & Dawkins, E. & Fick, S. & Garrett, R. & Godar, J. & Grimard, A. & Lake, S. & Larsen, R.K. & Mardas, N. & McDermott, C.L. & Meyfroidt, P. & Osbeck, M. & Persson, 2019. "Transparency and sustainability in global commodity supply chains," World Development, Elsevier, vol. 121(C), pages 163-177.
    4. Kamble, Sachin S. & Gunasekaran, Angappa & Gawankar, Shradha A., 2020. "Achieving sustainable performance in a data-driven agriculture supply chain: A review for research and applications," International Journal of Production Economics, Elsevier, vol. 219(C), pages 179-194.
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    Cited by:

    1. Manal Hamam & Daniela Spina & Roberta Selvaggi & Gabriella Vindigni & Gioacchino Pappalardo & Mario D'Amico & Gaetano Chinnici, 2023. "Financial sustainability in agri-food supply chains: A system approach," Economia agro-alimentare, FrancoAngeli Editore, vol. 25(2), pages 135-154.
    2. Yuriy Bilan & Yaryna Samusevych & Serhiy Lyeonov & Marcin Strzelec & Iryna Tenytska, 2022. "The Keys to Clean Energy Technology: Impact of Environmental Taxes on Biofuel Production and Consumption," Energies, MDPI, vol. 15(24), pages 1-22, December.

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    Agribusiness; Financial Economics;

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