The concept of ESG (Environmental, Social, Governance) represents a global approach to assessing company performance not only through financial indicators but also through their impact on the environment, society, and the quality of corporate governance.
In Ukrainian legislation, the term ESG does not yet have a separate definition; however, its principles are gradually being integrated through regulatory acts implementing the Sustainable Development Goals (SDGs).
Regulatory Framework: Strategic Level
Ukraine currently does not have a comprehensive ESG law, although several ESG-related elements are embedded in existing legislation.
The term “ESG” first appeared officially in the National Bank of Ukraine (NBU) White Paper on risk management.
The regulatory framework is grounded in documents adopted within the implementation of UN General Assembly Resolution No. 70/1 of 25 September 2015, which established the Sustainable Development Goals (SDGs).
Ukraine has implemented these principles through:
- Sustainable Development Goals until 2030;
- government action plans for their implementation covering all three ESG pillars;
- the Sustainability Reporting Implementation Strategy approved in 2024.
Under the Strategy, starting in 2025, Ukraine is expected to introduce regulation on the preparation of non-financial reporting aligned with the European Sustainability Reporting Standards (ESRS).
Current Reporting Requirements
Large enterprises are already required to prepare a management report under the Law of Ukraine “On Accounting and Financial Reporting in Ukraine.”
This report includes both financial and non-financial information. Methodological Recommendations No. 982 issued by the Ministry of Finance outline the main disclosure areas:
Environmental aspects — environmental impact indicators including water use, waste management, greenhouse gas emissions, energy consumption, and energy efficiency measures.
Social aspects — number of employees, share of women in management positions, working conditions, occupational health and safety, staff training, equal opportunities, respect for human rights, anti-corruption initiatives.
Governance — governance structure, responsibilities, corporate governance policy, dividend policy, internal control systems, supervisory board activities, transparency of ownership, and governance improvement plans.
ESG Regulation by Pillar
Environmental The legislative framework consists of:
- Law “On Environmental Protection”;
- Law “On Waste Management”;
- Law “On Environmental Impact Assessment”;
- Law “On Energy Efficiency”;
- as well as provisions of land, water, and forestry codes.
Social regulated by:
- Labour Code of Ukraine;
- Laws “On Employment,” “On Leave,” “On Pension Provision”;
- Laws “On Prevention and Combating Discrimination,” “On Ensuring Equal Rights and Opportunities for Women and Men.”
Governance based on:
- Law “On Prevention of Corruption”;
- Law “On Access to Public Information”;
- Laws “On Joint-Stock Companies,” “On Limited and Additional Liability Companies”;
- regulations governing state property management and capital markets.
Ukraine and the EU: Key Benchmarks and Differences
Ukraine aligns itself with European Union standards. We have compared the EU requirements with the current Ukrainian regulations; the table is provided below.
| Block | EU Requirement | Ukrainian Norm | Key Gap |
| E (Environment) | EU Taxonomy Regulation (2020/852) — disclosure of the share of Taxonomy-eligible activities (Climate Change Mitigation, Adaptation, Water Protection, Circular Economy, Pollution Control, Biodiversity). | Law “On Environmental Protection”, Law No. 2059-VIII (EIA), Law on Waste. | Lack of linkage between non-financial indicators and EU Taxonomy (Art. 8); no requirement to disclose CapEx/OpEx/Revenue based on sustainability criteria. |
| E (Environment) | ESRS E1 Climate — mandatory disclosure of Scope 1–3 (direct emissions, indirect energy emissions, other indirect emissions). | Ukrainian legislation covers emissions, EIA, and waste reporting, but lacks unified Scope 1–3 reporting. ESRS implementation roadmap exists (CMU No. 1015-r of 18.10.2024). | No requirement to measure or disclose Scope 1–3; no obligation to establish or disclose climate targets. |
| S (Social) | CSRD / ESRS S-set — disclosure of working conditions, human rights throughout the supply chain, diversity, health & safety. | Labour Code, equality and disability laws; partially reflected in Methodological Recommendations No. 982. | Lack of ESRS-level unified disclosure of S-metrics (supply chain, human rights, PAI indicators). |
| G (Governance) | CSRD (Directive 2013/34/EU as amended by 2022/2464) — mandatory non-financial reporting for a wide range of companies; independent assurance. | Law No. 996-XIV (Art. 11) establishes management reporting (Methodological Recommendations No. 982). | Absence of mandatory assurance and digital tagging of ESRS reports; transitional regime in place. |
| Financial Sector (SFDR) | Sustainable Finance Disclosure Regulation (2019/2088) — financial institutions must disclose PAI (principal adverse impacts of investments on sustainability factors). | No Ukrainian equivalent of SFDR; ESG regulation by NBU and NSSMC remains fragmented. | No comprehensive PAI regulation for the financial sector. |
Development of the Financial Sector: NBU Position
In April 2025, the National Bank of Ukraine published a White Paper on managing ESG risks in the financial sector.
The document outlines supervisory expectations and approaches to ESG risk reporting in the banking sector and provides for:
- development of a regulatory act on ESG risk management in banks by Q4 2026;
- establishing requirements for non-bank financial institutions by Q1 2027.
This regulatory act is expected to become the foundation for the future implementation of mandatory ESG risk management across all financial market participants.
Despite the absence of a formal ESG definition in Ukrainian legislation, ESG principles are already integrated into environmental, social, and governance regulatory frameworks.
Further harmonisation with EU regulations is the logical next step in the evolution of Ukrainian legislation and requires businesses to prepare in advance for enhanced transparency and reporting requirements.
Smartsolutions advises companies on the legal aspects of ESG implementation. Our experts support businesses in assessing regulatory requirements, determining readiness for sustainability reporting, and preparing internal policies aligned with upcoming ESRS standards. Together with our partners, we accompany companies throughout the entire adaptation process — from legal analysis to building effective corporate sustainability governance.
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