Risk management of ESG investment in sustainable development projects of companies located in geopolitical conflict zone

Анотація

Introduction. Contemporary challenges associated with geopolitical conflicts exert a profound influence on the business environment, particularly in regions characterised by heightened instability. Under such conditions, ESG investment plays a crucial role for companies implementing sustainable development projects aimed at long-term value creation, social responsibility, and environmental safety. However, the instability of conflict zones introduces a range of risks that necessitate developing mechanisms to enhance the effectiveness of sustainable project management. Methodology. The study employs a wide range of general scientific and applied methods, including analysis and synthesis, induction and deduction, generalisation, and statistical data analysis. Particular emphasis is placed on mathematical modelling, through which a model for detecting anomalies in the ESG indicators of an energy company was developed using the Isolation Forest algorithm. The integration of this algorithm with machine learning tools enabled the identification of abnormal deviations in ESG metrics, which may indicate potential inaccuracies or inconsistencies in corporate reporting, particularly regarding the representation of environmental “greening” processes. Results. The research focuses on the greenwashing risk, recognised as one of the main challenges of ESG investment. The analysis identified anomalous deviations in ESG indicators that may reflect discrepancies between actual performance data and sustainability information disclosed in corporate reports. The study substantiates the need to implement a systematic ESG compliance framework encompassing internal data collection standards, independent audits of non-financial reporting, algorithmic anomaly monitoring, internal control mechanisms, and transparent stakeholder communication. The proposed measures will enhance the reliability and transparency of ESG reporting, mitigate greenwashing risks, and establish a stronger foundation for managerial and investment decision-making.

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