Financial Risk Management Based on Corporate Social Responsibility in the Interests of Sustainable Development

Sergei G Vagin,Elena I Kostyukova,Natalia E Spiridonova,Tatiana M Vorozheykina

doi:10.3390/risks10020035

Abstract

This paper aims to study the perspectives of sustainable development amid the COVID-19 pandemic and crisis in 2021, backed by financial risk management and corporate social responsibility. To achieve this goal, the authors use the methods of regression analysis, horizontal and trend analysis, and variation analysis. As a result, it is proven—for the first time—that in isolation, investments and corporate social responsibility do not contribute positively to sustainable development. In addition, the authors determine the absence of the outflow of investments from the world economy during crises. Based on this, a new approach to crisis management of sustainable development is developed—it is based on stimulating corporate social responsibility, for which the complex recommendations in the sphere of state management are offered. The theoretical significance of the conclusions made consists in specifying the essence of financial risk management of sustainable development, which has to be conducted with a strict connection to and based on corporate social responsibility. The practical significance of the developed new approach and offered recommendations on its practical implementation consists of strengthening the scientific and methodological provision of economic crisis management of COVID-19 and the maximization of its contribution to sustainable development to support the Decade of Action.

Highlights

Sustainable development is a new criterion of socio-economic systems’ success, including economic growth and innovations
Total investment, calculated by the International Monetary Fund (2021), which characterizes the availability of financial resources in the economy; World giving index, calculated by Charities Aid Foundation (2021), which characterizes the level of corporate social responsibility; Sustainable development index, calculated by UN (2021), which characterizes the level of achievement of the Sustainable Development Goals (SDGs)
The analysis of multiple correlations has shown that the multiple correlation coefficient (R2 ) took the value 0.3745. This is a sign of the moderate connection between the indicators: the change of the sustainable development index by 37.45% is explained by the change of total investments in the economy and the world giving index; Variables multicollinearity test allowed obtaining the following results

Summary

Introduction

Sustainable development is a new criterion of socio-economic systems’ success, including economic growth and innovations (such as high technologies). The change of strategic milestones of economic systems requires the reconsideration of the methodology of studying their development’s cyclicity. The classical methodology of cyclicity analysis envisages the treatment of economic crisis as a period of the slowdown of economic growth rate. The main financial risk, according to Adachi-Sato and Vithessonthi (2021) and Çamlibel et al (2021), is the reduction of the total investments in the economy. Investments are considered in the neo-Keynesian treatment and envisage, not necessarily and , the outflow of investments from the economy and the reduction of expenditures of enterprises and households, i.e., the transitioning from consumption to saving of financial resources. Deficit of investments in the economy takes away the development opportunities, i.e., hinders the overcoming of a crisis

Objectives

Methods

Results

Conclusion