2022, issue 3, p. 7-22
Received 25.10.2022; Revised 02.11.2022; Accepted 15.11.2022
Published 29.11.2022; First Online 10.12.2022
https://doi.org/10.34229/2707-451X.22.3.2
Previous | FULL TEXT (in Ukrainian) | Next
Taxonomy of Objects for Sustainable Financing for Risk Management System Simulation
Andriy Honta 1,
Mariia Hryhorak 2 * 
, Olena Volovyk 2
1 LLC "BFSE GROUP", Kyiv, Ukraine
2 V.M. Glushkov Institute of Cybernetics of the NAS of Ukraine, Kyiv
* Correspondence: This email address is being protected from spambots. You need JavaScript enabled to view it.
Introduction. The post-war reconstruction of Ukraine's economy should be carried out on the principles of sustainable development and include the implementation of "green" technologies in various sectors in order to rationally use available natural resources and reduce the harmful impact on the environment. There are already active discussions carried out among economists and financiers about how the existing financial system will facilitate the transition to a green economy and increase the mobilization of public and private resources for investments in projects on sustainable development. The Ukraine’s European integration aspirations encourage researchers to study the experience of the European Union in creating a unified pan-European system of classification of sustainable economic activities ("EU taxonomy") and adapt them to the national characteristics in order to direct green investments to those activities that are important for achieving the goals of the European Green Deal. The above actualizes the problem of effective use of "sustainable" financing mechanisms in the implementation of programs and projects for the recovery of the economy of Ukraine in the post-war period.
The purpose of the article is to adapt the European experience to improve the taxonomy of objects of sustainable financing of reconstruction projects for national economy in the post-war period and to develop methodical approaches to risk management of investment projects of sustainable development using modern mathematical apparatus.
Attained results. The principles and ESG-factors of sustainable financing are summarized; the prerequisites for evaluating of sustainable development investment projects are identified using the proposed system of measures, indicators and indices of sustainable development. A structural model of the ESG risks and credit risks interrelationships through the prism of the economic activity of sustainable investment subjects is proposed. The necessity of creating a digital platform for collecting and processing ESG data, based on which it is expedient to evaluate sustainable development investment projects in the system of "region-enterprise-industry" relationships, has been proved. A set of ESG risk assessment methods and models was formed and a decision tree was developed for the selection of sustainable development investment projects, taking into account the taxonomy of sustainable economic activity and regional development priorities in the post-war period using screening and scoring models.
Conclusions. The application of the proposed principles, factors, indices and indicators of sustainable development allow to develop a new theoretical and methodological approach to assessing the risks of sustainable financing. The performed analysis of the screening and scoring procedures has justified a conclusion about the need of using the optimization theory for complex socio-ecological and economic systems together with various mathematical methods based on modern digital platforms in order to perform a comparative analysis of projects in the integrated system of "region-enterprise-industry" factors. This approach can justify the selection of attractive projects in terms of their financing that will contribute to the reduction of harmful effects on the environment, as well as to effective risk management during their implementation.
Keywords: sustainable finance, taxonomy of sustainable investment objects, ESG-factors, ESG-data, screening and scoring of sustainable development investment projects.
Cite as: Honta A., Hryhorak M., Volovyk O. Taxonomy of Objects for Sustainable Financing for Risk Management System Simulation. Cybernetics and Computer Technologies. 2022. 3. P. 7–22. (in Ukrainian) https://doi.org/10.34229/2707-451X.22.3.2
References
1. Halushkina T.P., Musina L.A., Potapenko V.H., Mashkov O.A., Kurykin S.I. Basic principles of implementation of the "green" economy model in Ukraine. (in Ukraine) http://www.dea.edu.ua/img/source/Book/1.pdf (accessed: 06.12.2021)
2. A European Green Deal. https://ec.europa.eu/info/strategy/priorities-2019-2024/european-green-deal_en (accessed: 08.11.2021)
3. FAQ: What is the EU Taxonomy and how will it work in practice? https://finance.ec.europa.eu/system/files/2021-04/sustainable-finance-taxonomy-faq_en.pdf (accessed: 08.11.2021)
4. Platform on Sustainable Finance. https://finance.ec.europa.eu/sustainable-finance/overview-sustainable-finance/platform-sustainable-finance_en#what (accessed: 08.11.2021)
5. Policy on the development of sustainable financing for the period up to 2025. (in Ukraine) https://bank.gov.ua/ua/news/all/natsionalniy-bank-prezentuvav-politiku-schodo-rozvitku-stalogo-finansuvannya-na-period-do-2025-roku (accessed: 08.11.2021)
6. Georgeson L., Maslin M., Poessinouw M. The global green economy: a review of concepts, definitions, measurement methodologies and their interactions. Gegraphy and Environment. 2017. 4 (1). Р. 1–23. https://doi.org/10.1002/ geo2.36
7. Chițimiea A., Minciu M., Manta A.M., Ciocoiu C.N., Veith C. The Drivers of Green Investment: A Bibliometric and Systematic Review. Sustainability. 2021. 13 (6). Р. 3507. https://doi.org/10.3390/su13063507
8. Zinchenko O.A. Global trends in "green" investing. Ekonomichnyi prostir. 2022. No. 177. P. 31–34. (in Ukraine)
9. Financial instruments for the sustainable development of the economy: materials of the 4th international scientific and practical conference (May 12, 2022). Chernivtsi : Chernivetskyi nats. un-t, 2022. 467 p. (in Ukraine)
10. Popescu I.-S., Hitaj C., Benetto E. Measuring the sustainability of investment funds: A critical review of methods and frameworks in sustainable finance. Journal of Cleaner Production. 2021. Vol. 314. https://doi.org/10.1016/j.jclepro.2021.128016
11. Тrushkina N.V. Green bonds as a tool for sustainable financing of the national economy of Ukraine within the framework of the implementation of the EU green taxonomy. Débats scientifiques et orientations prospectives du développement scientifique: collection de papiers scientifiques «ΛΌHOΣ» avec des matériaux de la III conférence scientifique et pratique internationale, Paris, 8 juillet 2022. Paris-Vinnytsia: La Fedeltà & Plateforme scientifique européenne, 2022. P. 22–26. (in Ukraine)
12. "Green" investments in sustainable development: world experience and the Ukrainian context / ker. proektu K. Markevych ; nauk. kons. V. Sidenko. Kyiv : Zapovit, 2019. 316 p. (in Ukraine)
13. Matos P. ESG and Responsible Institutional Investing Around the World: A Critical Review. Lviv: Vydavnytstvo Lvivskoi politekhniky, 2020. 88 p. https://doi.org/10.2139/ssrn.3668998
14. Stanley M. Sustainable Reality: Analyzing Risk and Returns of Sustainable Funds. Institute for Sustainable Investing. 2019. https://www.morganstanley.com/content/dam/msdotcom/ideas/sustainableinvesting-offers-financial-performance-loweredrisk/Sustainable_Reality_Analyzing_Risk_and_ Returns_of_Sustainable_Fun ds.pdf (accessed: 08.11.2021)
15. ESG risks in the banking sector. Effective strategies for exploiting opportunities and reducing risks. KPMG International. 2021. 31 p.
16. Warmerdam W. et al. “A study of banks’ investments in selected companies attributable to fossil fuels and renewable energy”. Profundo Banktrack. 2015.
17. What is the SEEA – System of Environmental Economic Accounting. https://seea.un.org (accessed: 08.11.2021)
18. Wealth Accounting and theValuation of Ecosystem Services. https://www.wavespartnership.org/ (accessed: 08.11.2021)
19. Green Growth Indicators – OESD. https://www.oecd.org/greengrowth/green-growth-indicators/ (accessed: 08.11.2021)
20. Actionable ESG data and benchmarks for financial markets. https://www.gresb.com/nl-en/ (accessed: 08.11.2021)
21. NGFS Climate Scenarios for central banks and supervisors. https://www.ngfs.net/en/liste-chronologique/ngfs-publications (accessed: 08.11.2021)
22. Recommendations of the Task Force on Climate-related Financial Disclosures. Final Report. TSFD. https://www.fsb-tcfd.org/ wp-content/uploads/2017/06/FINAL-2017-TCFD-Report-11052018.pdf (accessed: 08.11.2021)
23. Digital Technologies for Mobilizing Sustainable Finance. Sustainable digital Finance Alliance. https://docs.wixstatic.com/ugd/3d4f2c_6767ef5b999c4e3fa42c0e05e6ea2ac3.pdf (accessed: 08.11.2021)
24. Overview of sustainable finance. https://finance.ec.europa.eu/sustainable-finance/overview-sustainable-finance/platform-sustainable-finance_en#what (accessed: 08.11.2021)
25. Steven C., Wheelwright S.C., Kim B. C. Revolutionizing product development: quantum leaps in speed, efficiency and quality. Free Press, 2011. 392 p.
26. Routledge Handbook of Social and Sustainable Finance. Edited by Othmar M. Lehner. New York. Routledge. 2017. 652 р.
ISSN 2707-451X (Online)
ISSN 2707-4501 (Print)
Previous | FULL TEXT (in Ukrainian) | Next