Russia's politically motivated foreign ownership and its impact on sustainability disclosure

Purpose This study aims to investigate how politically motivated Russian foreign ownership influences corporate sustainability disclosure in Georgia, an emerging economy marked by geopolitical vulnerability and a high concentration of foreign capital in strategic sectors. Design/methodology/approach We compiled a hand-collected dataset of 300 firm-year observations for 51 publicly traded entities admitted to Georgia's capital market between 2018 and 2023. Using the EU's Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards (ESRS) as conceptual benchmarks, we constructed firm-level sustainability disclosure scores. The analysis applies ordinary least squares regressions with controls for corporate governance, financial and disclosure-related characteristics, and incorporates sector and year fixed effects. Findings Russian-owned entities disclose significantly less sustainability information, particularly in the social and governance dimensions, while environmental disclosures appear less affected due to sector-specific regulations. These firms exhibit selective reporting behavior that favors discretion over accountability. The negative effect is unique to Russian ownership and is not observed among other foreign-owned firms. Originality/value This study conceptualizes and empirically validates politically motivated foreign ownership as a distinct form of foreign control that can undermine sustainability disclosure. The findings challenge the assumption that foreign ownership uniformly promotes transparency, particularly in strategically important sectors. The results carry important implications for regulators in emerging markets seeking to strengthen sustainability reporting and governance standards for firms owned by politically driven, non-Western investors.