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Sergii Shakalov
100% Confidence in future
Reputation is a result of actions that have become known and appreciated. What were the actions that contributed to the formation of the KNESS Group's reputation?

We put our commitments into every our projects, every service, everything we do. We accept all our partners' risks and record document in contracts. If something goes wrong – we compensate for the shortfall in profits. This approach motivates our team for success. If the implementation of a project is threatened, the whole team joins in to eliminate the threat. Therefore, for the ten years of our work, not a single project has lead our partners to losses. Probably, this is what shapes our reputation. Of course, we are very thorough in assessing our capabilities, but if we say: "Yes, we get to work,within specified deadlines and certain amount of money," we will never change the budget. Whatever happens, this figure remains unchanged. This is one of our values. The same applies to deadlines, and the quality of work performed. Changes are possible only if requested by the client.

What is equally important for our reputation is that we are continually developing our team. The team is learning; it shares the values: both mine and those of the shareholders. Accordingly, the team perceives the business as its own. If one of the top managers makes a commitment, it means that the company has made a commitment. Even if a senior manager has made a mistake in the eyes of shareholders, the company has already taken responsibility. The word will be kept under any circumstances. It is a matter of principle for us to strictly respect the agreements, no matter verbal or legally recorded. If we have agreed, we mean it. Signed contracts are an outcome. We also select partners accordingly, i.e., we work with those partners who trust us and whom we trust.

Does the company's reputation correlate with the reputation of the industry where it operates?

It would be wrong to say that the reputation of the field and the reputation of the company are the same. For instance, today, the actions of the Ministry of Energy and the relevant committee have made the industry look not too respectable. We do not support the policy they have been pursuing regarding renewable energy since mid-2019: it is harmful not only for the industry but for business in Ukraine as a whole. But this does not mean that our company has also lost its reputation because of the events in the industry. However, it is the country that may lose its reputation, which is very unfortunate. We make every effort to protect the business interests of our partners. Therefore, the industry does not affect the company's reputation – it may affect the company's business strategy, profit, but not reputation. Our partners distinguish between our company and our country without confusing them.

How do different stakeholder groups feel about renewables in Ukraine now?

Ukraine's renewables have never been in such an uncertain situation. On the one hand, the state declares a "green" transition and writes strategies where the country's energy will be RES-based; on the other, it discriminates against investors in RES. This does not benefit either the industry or the country in general. All market players clearly understand that the transition to renewable energy is inevitable; it is only a question of the speed of this transition and of the understanding of how and when to do it. There is no unity here, and if there is no unity, there is no strategy that would ensure the trust of all stakeholders. We need to work on this: rather than preparing declarations of a green transition, we need to develop a strategy that all stakeholders will support. In this case, if the state commits itself to implement this strategy, the investors will express more confidence. But you must not declare anything and then fall short of your obligations.

Is an attitude to businesses operating in the field of RES any different in Ukraine and around the world?

There are different approaches. There are many countries that differ in their business models from Ukraine. For instance, there is no feed-in tariff in USA at all; they have a market instead. Whatever price the market has set, you work with it. Does this lead to the rebalancing of the US energy system? Of course, it does. Does this lead to additional inconveniences? Of course. But in some hypothetical Arizona, generating electricity from the sun is more profitable than from coal, it is clear already. In Ukraine, the situation is a bit different; we have a different energy system; our market is not working. In some countries, a feed-in tariff exists; others use auctions; introduce income tax benefits, but everywhere there is some sort of support for renewable energy, in one form or another. The day when energy from renewable sources will be much more profitable than conventional all over the world is approaching. In some countries, this has already happened; in others, it has not – but this can only be achieved in undistorted markets. In Ukraine, the electricity market is still distorted: it will take some time for it to develop into a real market. And then it will be possible indeed to hold a tender where renewable energy will compete with coal generation - and we will see who wins. Not coal, I'm sure. The models vary everywhere, but the point is mostly the same: everyone is moving towards renewable energy because most developed countries are well aware of what they will get as a result. Solving the environmental problem is important; moreover, the cost of electricity will also be cheaper than it is now. It is just a question of when and how. The model itself is under discussion: what is more convenient for each country; what should be used as its basis: solar, wind, or geothermal energy? How to balance it all? How to make it possible for the consumers to receive electricity predictably? How to convince them to think that it is profitable to generate electricity by their own? There are still a lot of stages ahead to achieve a more or less complete system; it is still a long way to go through. And indeed, it will be a difficult path, but we must understand one principle: the faster, the better. Everything slow is bad; everything fast is good.

Many countries and cities, many giants of global business, large and medium- sized businesses have declared their intent to switch to 100% clean energy. How do you think this affected their reputation?

Mature countries, mature companies are aware of what they are doing, and what footprint, what
legacy they want to leave behind for the next coming generations. This is maturity; it is understanding of what you are doing. Such countries, cities, and companies should enjoy the utmost regard on the part of society.

The reputation of the market leader influences the perception of the whole industry. What has KNESS Group contributed to the industry's reputation?

I am sincerely convinced that the activity of our group has had a significant impact on the development of renewable energy in Ukraine; it has been and remains one of the factors contributing to the success and growth of this market. Our activities, our reputation strategy, our efforts to mobilize investors. After all, it was not the state that attracted investors to the solar energy sector – it was business that did it. We have indeed set certain standards for a Ukrainian company in this sector. We participated in the launch of this trend; we participated in the serious scaling of this business, as well as in the development of the business idea itself. Therefore, I believe that our company has made a great and important contribution to the development of this sector. At least in terms of the technologies we implemented and the number of workplaces we created.

How does the attitude to the importance of building one's reputation change with the development – from a small company to an industry leader, and then to your own niche in international business?

Reputation is important for businesses of all sizes. If you do not establish reputational values at the start then it will be too late, because reputational values must live not only in you, but also in your team. If you do not make a point of having the true good reputation from the start, it will be extremely difficult for you to build it in the future. A bad reputation is like the shackles on your feet: they will not let you move forward. Therefore, reputation is important at all stages of the company's development. But as the company grows, the weight of its reputation grows, too, because in big business, it is not so much the price of the service that matters as the quality of the service, аnd reputation. There are only two sellable things in this world: reputation and innovation. If these two values are the foundation of your business, you will grow.

Reputation and societal utility of the company are the main components of intangible business assets. How are they related with each other? What social projects have contributed to the reputation of KNESS Group?

I think the most important social activity is that we started to develop high-tech manufacture here in Ukraine, creating jobs and rejecting business models where the construction of solar power plants would not use Ukrainian components. In our technical solutions, we have always been trying to scale up the use of parts made in Ukraine as much as possible. This is valuable and important for us. Just 5-6 years ago, there was not much Ukrainian in the solar industry, except for mounting frames; everything else was imported. And today, there are large power plants made 100% of Ukrainian components. This means jobs, taxes, and this is our contribution to the growth of the Ukrainian economy. We believe that this is our main social function. We can, of course, talk about our other projects, such as helping village councils, communities, installing street lighting, paving roads... But please, believe me, this is not so important compared to the fact that there is a significant part 'made in Ukraine' in gigawatts of solar power plants in Ukraine.

The company's employees are its ambassadors to the world outside because it is through their activities and actions that an important part of reputation is formed, based on the real experience of interaction with the company. What reputational characteristics of the company have employees formed with their attitude and activities?

First of all, only those join our team who share our values: both reputational and innovative, our
team spirit, our attitude to our partners and customers. This is an important level of trust for us: the management trusts its team, and the team trusts its management. We do not have very strict rules in the company; there is not even a serious system of disciplinary measures: everyone has the right to make a mistake – this is rooted in our values. The company scales up basing the values we have all accepted, we believe in, and live by.

Have you been faced with a prejudiced attitude to business with Ukrainian roots in the large global markets?

We have been working on our reputation for a long time. We know that we are respected outside Ukraine as well. We have not faced any form of prejudice there yet.

Does the KNESS Group have an opinion on whether there are reputational characteristics that should be common to all Ukrainian businesses operating abroad?

How can international business born in Ukraine help improve the country's reputation? Everything is very simple. When you come to other countries and say that you are a company born in Ukraine and you are Ukrainians, any international partner will percieve you as Ukrainians. And if you are fair, your partners will also believe that Ukraine can be honest. It is a matter of great importance. For us, no matter where we work – in Ukraine or elsewhere – the values are the same everywhere. Whether we work with African, or European, or American partners – we will have the same reputation because it rests on our values. They are not invented by PR experts – these are the same values we really follow.

What does the international community learn about Ukraine through the activities of KNESS Group?

That Ukraine also has companies that can work fairly, work towards results, and respect their partners.

And they can demand to be treated equally. Mutual respect is a must- have in any business deal. We work only in a win-win strategy. Reputation is the quintessence of our values.

Is it clear already where in the world the progress and care for the planet win, and where the chances are still quite high for the past to persist? And where is Ukraine in this confrontation?

Renewable energy wins everywhere; the only question is how fast it will achieve its complete victory. After all, there are accelerators somewhere. For example, Europe places more value on the environment than, for example, many African countries do. But for Africa, renewable energy has a different value – it is both diversification and low prices compared to the sources available to them now. Renewable energy has many different values and benefits attached to it: this is the environment, low cost, geographic distribution, predictability, clarity, аnd simplicity. Renewable energy is no longer at war with anyone; it has already won. The only question is how quickly it can be implemented in certain country models.

Reputation is a dynamic feature, so what standing does the KNESS Group seek – how will knowledge about the company develop? What will people say about the KNESS Group in 5 years?

In 5 years, people will also say that reputation and values have not changed. This is the only static value, the constant that the company must have. If the business model is the same, people are the same, or if there is some kind of transfer of values in the renewed team – then the reputation remains the same.