| Abstract [eng] |
In this Master’s Thesis the significance of ESG – Environmental, Social and Governance – principles to selected company stakeholders is analyzed. The current legal framework for ESG principles, how it operates and the impact it creates is examined and in this Thesis it is also sought to find out whether the application and disclosure of ESG principles contributes to the creation of value for corporate stakeholders. The understanding of the concepts of the ESG principles is developed by discussing the main objectives and challenges of each ESG area, analyzing the emerging value of the three ESG areas as a unity, and examining the current legal framework and prospects for future regulation. In this Thesis the impact of the application and disclosure of ESG principles on three selected groups of stakeholders of companies – investors, employees and creditors – is analyzed. In striking a balance between meeting the expectations and needs of the company and its shareholders and the expectations and needs of the various stakeholders of the company, it has been observed that the proper application and disclosure of ESG principles can lead to a range of benefits for different stakeholders, i.e. the application and proper disclosure of ESG principles in a company’s operations enables investors to satisfy their financial interests without compromising the expectations of other stakeholders, enables employees to make appropriate choices about their employment, enables them to assess the sustainability, security and meaningfulness of their work, and enables banks, as the companies’ main creditors, to make the most appropriate decisions about the companies’ loan financing, pricing and risk assessment. In this Master’s Thesis the national practice in Lithuania and other selected EU Member States to regulate the application and disclosure of ESG principles is discussed and the impact of the regulation is examined. It was found that under the current regulation, there are very few companies in Lithuania that are required to prepare reports disclosing the application of certain ESG criteria and there is no obligation to follow a specific methodology, which results in the fact that ESG disclosures made by Lithuanian companies are difficult to compare and do not allow for a comprehensive assessment of the situation of the application of the ESG principles in the Lithuanian companies. The analysis of the national practices of the selected EU Member States showed that other countries facing similar regulatory problems have chosen to address them through soft law resources, by increasing the clarity of the concepts of ESG principles, by promoting wider application of these principles and by trying to introduce uniform national ESG reporting methodologies. |
