DOI: https://doi.org/10.62204/2336-498X-2025-1-13

SUSTAINABLE DEVELOPMENT AS A FACTOR

OF ENTERPRISE COMPETITIVENESS

Tetiana Tokhtamysh,

Candidate of Economic Sciences, Associate Professor,

O.M. Beketov National University of urban economy in Kharkiv, Ukraine,

tunechka10@gmail.com; ORCID ID: 0000-0002-5534-3284

Olena Sheptukha,

Candidate of Economic Sciences, Associate Professor,

O.M. Beketov National University of urban economy in Kharkiv, Ukraine,

sheptuhaom@gmail.com; ORCID ID: 0000-0002-6117-5125

Olena Vinnychenko,

Candidate of Economic Sciences, Associate Professor,

O.M. Beketov National University of urban economy in Kharkiv, Ukraine,

viavi1974@gmail.com; ORCID ID: 0000-0003-4681-7975

Annotation. The article defines the relationship between sustainable development and competitiveness of enterprises. Integration of the principles of sustainable development into various business strategies of enterprises will increase their competitiveness by optimizing costs, creating innovative solutions and promoting social advancement.

Keywords: sustainable development, enterprise, Sustainable Development Goals, competitiveness, business strategies.

Introduction. In the difficult economic conditions currently prevailing in Ukraine, the problem of competitiveness is relevant for enterprises of any industry.  Therefore, one of the primary and most important tasks of state policy is to increase the competitiveness of the national economy. Competitiveness means not only the ability of an enterprise to survive in the market, but also affects its ability to innovate, create jobs and make a significant contribution to the country’s socio-economic development. That is why modern enterprises are increasingly focused on sustainable development policy and achieving its goals. Competitiveness and sustainable development are closely interrelated concepts that determine the success of economic development in modern society  [10].

Sustainable development is designed to meet the needs of modern society and is aimed at preserving natural resources, environmental sustainability and social justice. These are its main components. As for competitiveness, it requires efficient and, at the same time, rational use of all resources by enterprises, introduction of innovative technologies, improvement of product quality and increase in productivity.

Competitiveness is a factor that helps to realize the Sustainable Development Goals. It ensures that the products of national producers have a proper place in the domestic and foreign markets. That is why it is advisable to introduce the concept of competitiveness into public policy, the implementation of which can bring Ukraine, its regions and industries to the forefront of the world.

Literature review. Ukraine, like other UN member states, joined the global process of ensuring sustainable development after the adoption of the UN Sustainable Development Summit in September 2015. It was held as part of the 70th session of the UN General Assembly in New York. The outcome document “Transforming our world: the 2030 Agenda for Sustainable Development” was approved there, which approved 17 sustainable development goals and 169 targets by 2030. They are aimed at overcoming poverty and hunger, protecting the environment, and ensuring peace and prosperity for all people in the world. Nine years have passed since their implementation. During this time, Ukraine has developed national targets for achieving the Sustainable Development Goals and indicators of their achievement, introduced a system of annual monitoring of their achievement, and prepared the first Voluntary National Review of their achievement, which does not include information on the contribution of business [7].

“Leave no one behind” is a fundamental principle of the Sustainable Development Goals [8].

According to the second annual expert study of the level of integration of the UN Sustainable Development Goals into the business strategy and development strategy of Ukraine – the Sustainable Development Index – conducted by the European Business Association [5], 96% of businesses in their activities are guided by the Sustainable Development Goals in 2022, which corresponds to the level of 2021.

Aims and objectives of the study. The purpose of the article is to study the relationship between sustainable development and competitiveness of enterprises based on its Goals.

To achieve this goal, the following tasks were set and solved:

– identified the main areas of sustainable business development in Ukraine;

– analyzed the current state of implementation of the Sustainable Development Goals;

– identified sources of increasing the competitiveness of enterprises based on the concepts of sustainable development;

– the relationship between enterprise competitiveness and sustainable development was investigated, and its directions were identified.

Research methods. During martial law, Ukrainian business focused on the social component of sustainable development. Thus, the main areas of sustainable business development in Ukraine under martial law were

– support for employees and their families in relocation, payment of salaries during forced downtime, payment of compensation to families of those injured in the hostilities (97%);

– support for the military in the Armed Forces of Ukraine and the Territorial Defense Forces (84%);

– providing humanitarian support to internally displaced persons (69%);

– assistance to medical institutions (66%) [2].

Sustainable development defines the path the company is following and covers several aspects:

– how the company operates from a business perspective. It is about building a team and using resources within the company;

– the client dimension, i.e., which clients the company works with and which it prioritizes, how it sees its client base in the near future

– what projects the company is implementing.

The history of sustainability projects is interesting because the company always receives more than it gives. This ensures its competitiveness in the market [8].

Fig. 1 shows the top 4 areas of sustainable development in 2022.

Fig. 1 shows the most relevant areas of sustainable development, namely the social component and the percentage of respondents. 

At the end of 2022, the main Sustainable Development Goals for business in Ukraine were:

– 1 – overcoming poverty;

– 16 – peace, justice and strong institutions;

– 2 – overcoming hunger;

– 3 – good health and longevity.

For comparison, the main Sustainable Business Development Goals in the world in 2022 were:

– 8 – decent work and economic growth;

– 13 – mitigating the effects of climate change;

– 12 – responsible consumption and production;

– 7 – affordable and clean energy;

– 9 – industry, innovation and infrastructure [5; 9].

As we can see, there is a huge difference in the priorities of Ukraine and the world. This is primarily due to the martial law that was introduced in our country in 2022 and continues to this day.

The assessment of the business contribution to the Sustainable Development Goals is conducted to identify achievements and challenges in integrating the Sustainable Development Goals into the strategy and practice of domestic companies, as well as to develop recommendations for strengthening the role of Ukrainian business in achieving the Sustainable Development Goals.

Achieving the Sustainable Development Goals requires the unification of government, business, and society. The private sector plays a significant role in implementing the 2030 Agenda for Sustainable Development [11]. However, to be successful, businesses need to operate in a developed society. Therefore, it is about a profitable, sustainable and long-term partnership between business and society.

Two main indicators are used to measure progress towards the Sustainable Development Goals: the current status index and the expected progress index. The definition of the indices answers two questions:

1. Current status index: What progress has been made since 2015?
2. Expected progress index: How likely is it that the goals will be achieved by 2030?

The Expected Progress Index measures the gap between the projected value of an indicator and the specified target value. Both indices are constructed at the sub-indicator level (series, disaggregation, or subcomponent of an indicator) and can be aggregated at the indicator, target, and goal levels if desired. In this analysis, the current state index is presented at the target level (snapshot), and the expected progress index is presented at the target level (panel) [2].

In Fig. 2 shows the integral value of the Sustainable Development Index of Ukraine in 2021-2022.

As can be seen from Fig. 2, the highest value of the Sustainable Development Index of Ukraine for the period under review was in business. In 2022, the index value was 3.8 points, which is higher than in 2021 (3.6 points). Overall, there is a positive trend in other areas: environmental, social, and economic.

In 2022, the integral value of the Sustainable Development Index of Ukraine was 3.5 out of 5, which is 0.23 points higher than in 2021.

According to 2022 data, 74% of enterprises kept the number of employees engaged in sustainable development projects at the pre-war level. This confirms the relevance and importance of this area of research.  In particular:

– 5% of enterprises do not have a separate department or employees engaged in sustainable development projects;

– 10% of enterprises have increased the number of employees in the relevant departments, mainly in information technology and telecommunications;

– 11% of companies reduced the number of employees in the relevant departments.

The main barriers that prevent companies from implementing sustainable development projects (Fig. 3).

According to experts, the implementation of the Sustainable Development Goals in Ukraine during the post-war recovery will be facilitated by:

1. Grants and targeted non-repayable assistance from international organizations.
2. Comprehensive support (financial, organizational, advisory and informational) for innovative projects.
3. Tax benefits.
4. Regulatory changes.

That is why businesses should focus on achieving the Sustainable Development Goals.

The main part. Sources of increasing the competitiveness of enterprises through the use of sustainable development concepts are:

– staff motivation;

– investment attractiveness through greater transparency;

– tax and other preferences;

– better relations with local authorities;

– customer loyalty [6].

Today, traditional methods of creating competitive advantages require new tools that contain “socially oriented components” and help strengthen relations between the enterprise, the government and society. This will help to develop and strengthen long-term relationships with consumers, attract highly qualified personnel, receive support from the state, and increase competitiveness. One of such tools may be the management of enterprise competitiveness on the basis of sustainable development, which implies the responsibility and participation of the enterprise in solving various problems, including social and environmental problems.

It is advisable to define the links between the Sustainable Development Goals and the concept of sustainable competitiveness of enterprises in accordance with three categories of competitiveness that are closely interrelated. These include economic, social and environmental competitiveness (Table 1).

Enterprise competitiveness management is a complex process based on the principles of comprehensiveness and systematicity. It is aimed at systematically updating and developing the competitive advantages of the enterprise. This process takes into account the impact of external factors, as well as the need to optimize profits to ensure a sustainable position in the market [1; 3].

The main purpose of enterprise competitiveness management is to ensure a sustainable competitive position of the enterprise in the market, increase the level of profitability, improve the quality of products and services, reduce costs, improve the marketing strategy, increase investment, etc. Managing the company’s competitiveness allows it to maintain and strengthen its market position, ensure its development and growth, and respond to changes in the market and competitive environment.

The subject of enterprise competitiveness management is its management and staff involved in the development and implementation of competitiveness management strategies and tactics. The object of enterprise competitiveness management is the enterprise itself, its products and services, business processes and structural and business units that need to be optimized and adapted to achieve and maintain competitive advantages in the market.

Both internal and external factors influence the process of managing the company’s competitiveness. The internal factors include the organizational and legal form of the enterprise, its structure, level of scientific and technological development, social potential, innovation potential, available resources, psychological climate, sales policy, etc. External factors include the production, scientific, technical and social environment.

Enterprise competitiveness management involves analyzing and managing all these factors to ensure competitive advantages and achieve success in the market. Based on the analysis of the factors of influence, the company’s strategies are formed to ensure that its competitive advantages are enhanced. Strategies may include such measures as improving product quality, expanding product range, reducing costs, improving production processes, improving existing marketing strategies, etc. Enterprise competitiveness management is an ongoing and future-oriented process that requires monitoring and evaluation of the results of the implemented measures and mandatory adjustments to the strategy if necessary.

Successful functioning of an enterprise in a changing business environment while maintaining environmental, social and economic stability should be ensured by competitiveness management strategies based on sustainable development.

The main directions of such strategies are:

1. Environmental sustainability: companies that strive for sustainable development focus on reducing the impact of their activities on the environment. They introduce environmental standards and efficient technologies to reduce energy consumption, use renewable energy sources, and practice efficient resource use and waste management.
2. Social responsibility: the competitiveness of an enterprise also depends on the management’s relations with employees, customers, consumers, suppliers, intermediaries, partners and society as a whole. Businesses must adhere to high labor standards, ensure the safety and health of employees, create jobs with adequate remuneration, adhere to ethical standards in their interactions with customers and consumers, and actively participate in the development of local communities.
3. Supply chain management: sustainability requires consideration of the entire supply chain. Businesses must work with suppliers to ensure high quality materials, compliance with social and environmental standards, and effective risk management. It is important to establish partnerships, promote innovation and ensure transparency throughout the supply chain.

It should be noted that sustainability-oriented competitiveness management strategies are individualized and should take into account the specifics of the enterprise, its industry and context. The optimal strategy will include a balance between economic, environmental and social goals, while ensuring long-term stability and success of the enterprise in the global competitive environment. Sustainable development has a positive impact on the company’s competitiveness because it is based on ensuring a balance between the economic, social and environmental aspects of the company’s activities. This allows it to maintain and increase the level of competitiveness in the long term, as the company becomes more resistant to changes in the external environment, ensures an increase in the level of trust of consumers and other stakeholders, and also allows to reduce the risks associated with changes in legislation and regulations that may significantly affect the company’s activities.

Enterprise competitiveness management in general and enterprise competitiveness management based on sustainable development in particular represent two different approaches to business management. The former focuses on how an enterprise can be more efficient in producing goods or services in the marketplace than its competitors. This process may include strategies to reduce costs, improve product quality, increase profitability, increase innovation, etc.

On the other hand, managing the competitiveness of an enterprise on the basis of sustainable development also includes social and environmental aspects of business management. This approach assumes that a business should act not only in its own interests but also take into account the impact of its activities on people and the environment. Therefore, the main difference between these two approaches is that managing the competitiveness of an enterprise on the basis of sustainable development implies that the success of an enterprise depends not only on its financial results, but also on how it affects the social and environmental spheres. This approach helps to improve the company’s reputation, increase trust among consumers and investors, and ensure sustainable development not only of the company itself but also of society as a whole.

Summarizing the above, we should summarize the importance of implementing the Sustainable Development Goals for domestic enterprises as an important indicator of competitiveness:

– enterprises that directed their sustainable development programs to support the state primarily focused on addressing social issues;

– the budgets of enterprises that were directed to the implementation of sustainable development projects increased several times;

– despite the martial law, the number of enterprises that saw obstacles in their implementation of the Sustainable Development Goals has decreased;

– businesses have improved their assessment of the government’s efforts to implement the Sustainable Development Goals in the National Recovery Plan;

– the 2022 Sustainable Development Goals prioritized by businesses are in line with the goals of developing countries, so in effect, business has begun to perform the function of the state.

Conclusions. The interconnection of sustainable development and competitiveness of enterprises is manifested in the complementarity of these categories. This reflects the need of modern society to take into account economic, environmental and social aspects in its activities. Integration of the principles of sustainable development into various business strategies of enterprises allows to increase their competitiveness by optimizing costs, creating innovative solutions and promoting social advancement.

Thus, the synergy between competitiveness and sustainable development is a strategically important area for achieving success in today’s business environment. Competitiveness is an important factor in the implementation of the Sustainable Development Goals, as the ability to compete both in the domestic and global markets encourages enterprises to introduce innovative technologies, replace existing production technologies with more environmentally friendly ones, and increases the company’s productivity and profit level.

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