Implementation of ESG principles in the functionning of agri-food enterprises in the context of ensuring capitalization strategy

Abstract

This research aims to analyze the features of the application of ESG principles in the functioning of agri-food enterprises in the context of ensuring the capitalization strategy and determining further prospects. The research used the following methods: abstract-logical and synthesis, graphing; monographic, and generalization. It was found that the capitalization of business entities is the indicator that shows the efficiency of their use of resources and points to prospects and opportunities for development. Accordingly, an increase in the enterprise's capitalization arouses the interest of investors and, thereby, expands its financial prospects. In addition, the increase in the value of the enterprise will contribute to the growth of equity capital. The strategy of managing the market capitalization of agri-food enterprises needs implementation and ensuring the concept of sustainable development and corporate social responsibility. It has been studied that the increased demand for ESG forces organizations to consider the principles of sustainable development. Attention is focused on the main reasons for the increased demand for ESG for business entities in modern conditions. In particular, the transition to ESG principles and adherence to them in agri-food enterprises ensures the satisfaction of the interests of all stakeholders. The image and business reputation of the enterprise becomes an intangible asset that brings additional benefits, including financial ones. As a tool for increasing the market capitalization of an agri-food enterprise, ESG investments should be aimed at effective reputation management and receiving benefits from creating a high-quality corporate image and business reputation. The agri-food sphere was one of the first to feel the consequences of martial law in Ukraine. The war forced agrarians to become food security guards. It was found that the full-scale war in Ukraine forced domestic business entities to reorient their sustainable development programs. If earlier agricultural formations were invested in projects of reduction of emissions into the environment, waste management, implementation of ESG principles in strategies of managing market capitalization, and sustainable development of the enterprise as a whole, now most of the funds are directed to support the military, various humanitarian programs, as well as programs for finding alternative fuel and energy resources, ways to save electricity and implement alternative sources of energy, etc. In addition, several initiatives are aimed at rebuilding the stricken regions, considering "green" standards. The preservation of the European vector of Ukraine's development and the prospect of a joint open market, which requires investments in developing relevant business processes and standards from domestic business entities in the agri-food sphere, was confirmed. The nature of future investments in the country's reconstruction will consider ESG components, forcing agricultural formations to adjust and adapt products (services) and processes to new requirements. Keywords: management, enterprise, agri-food sphere, ESG principles, strategy, market capitalization, sustainable development.