Socially-oriented approach to financial risk management as the basis of support for the sdgs in entrepreneurship

Zhilkina, Anna N. et al. Article Socially-oriented approach to financial risk management as the basis of support for the sdgs in entrepreneurship Risks Provided in Cooperation with: MDPI – Multidisciplinary Digital Publishing Institute, Basel Suggested Citation: Zhilkina, Anna N. et al. (2022) : Socially-oriented approach to financial risk management as the basis of support for the sdgs in entrepreneurship, Risks, ISSN 2227-9091, MDPI, Basel, Vol. 10, Iss. 2, pp. 1-18, https://doi.org/10.3390/risks10020042 This Version is available at: https://hdl.handle.net/10419/258352 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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Socially-Oriented Approach to Financial Risk Management as the Basis of Support for the SDGs in Entrepreneurship. Risks 10: 42. https://doi.org/10.3390/ risks10020042 Academic Editor: Elena Popkova Received: 28 December 2021 Accepted: 7 February 2022 Published: 16 February 2022 Publisher’s Note: MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affiliations. Copyright: © 2022 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/). risks Article Socially-Oriented Approach to Financial Risk Management as the Basis of Support for the SDGs in Entrepreneurship Anna N. Zhilkina 1, Marina V. Karp 2, Anna V. Bodiako 3, Samal M. Smagulova 4, Tatiana M. Rogulenko 2,* and Svetlana V. Ponomareva 5 1Department of Finance and Credit, State University of Management, 99 Ryazansky Ave., 109542 Moscow, Russia; [email protected] 2Department of Accounting, Auditing and Taxation, State University of Management, 99 Ryazansky Ave., 109542 Moscow, Russia; [email protected] 3Department of Audit and Corporate Reporting at the Faculty of Taxes, Audit and Business Analysis, Financial University under the Government of the Russian Federation, 125167 Moscow, Russia; [email protected] 4Department of World Economy and International Economic Relations, State University of Management, 99 Ryazansky Ave., 109542 Moscow, Russia; [email protected] 5Department Audit and Internal Control, Saint Petersburg State University of Economics, 191023 Saint Petersburg, Russia; [email protected]u *Correspondence: tm_r[email protected] Abstract: This paper demonstrates that the level of financial risks and the impact of the COVID- 19 pandemic and crisis on them are high. The existing approach to financial risk management is not very effective and does not allow coping with financial risks in entrepreneurship, not even in a certain category of countries. As a prospective alternative, we offer a new socially-oriented approach. The theoretical value of the paper lies in the offering and scientific substantiation of a new hypothesis: that the SDGs could and should be constantly supported by business in their financial risk management with the help of the socially-oriented approach, which is available and expedient for use under the conditions of economic crisis. The practical value of the received results is as follows: the developed new (alternative) socially-oriented approach to financial risk management in entrepreneurship allows increasing the effectiveness of financial risk management in entrepreneurship and raising its robustness against the current COVID-19 crisis. The social importance of the obtained conclusions and results is that the developed approach allows for and stimulates continuous support for the SDGs in entrepreneurship. Keywords: socially-oriented approach; financialriskmanagement; support fortheSDGs;entrepreneurship 1. Introduction The Sustainable Development Goals (SDGs) are supported widely and actively in entrepreneurship around the world. This is reflected in the high and annually growing level of corporate social responsibility. The problem is that, first, this responsibility is not connected to finance on the whole and to financial risk management in particular (Ma and Ren 2021). Corporate social responsibility is a tool of achieving the growth of labor efficiency (through increasing employee loyalty to the company) and stimulating sales (through improving social and ecological properties of products and an increase in consumer loyalty). Second, an economic crisis is considered to be a phase of the economic cycle, which is unfavorable for manifesting corporate social responsibility. Though many companies continue to manifest high corporate social responsibility under the conditions of crisis, these are mainly large business structures that consider measures connected to the implementation of this responsibility unprofitable (do not strive to gain advantages from it), since under the conditions of crisis: (1) unemployment grows, and employees hold onto their jobs, Risks 2022,10, 42. https://doi.org/10.3390/risks10020042 https://www.mdpi.com/journal/risks Risks 2022,10, 42 2 of 18 regardless of loyalty to the company and (2) consumers are not interested and/or cannot pay an increased price for the improved social or ecological properties of products. That is, under the conditions of crisis, corporate social responsibility is associated with non-profit activities and is considered to be exclusive (not widely accessible) (Torrès et al. 2021). For sustainable development, temporary refusal of support for the SDGs under the conditions of crisis could destroy all previous progress and mean the return to the initial (unsustainable) state of society, business, and economy. Responsible businesses cannot quickly adapt to the reduction of the level of corporate social responsibility and experience the imbalance of corporate culture and crisis management. In addition to this, competitive advantages in loyalty are lost: business suffers image losses and loses its social capita and employee loyalty (best personnel, increased productiveness, and unique corporate knowledge) and consumer loyalty (stable and high demand and reduced price-demand elasticity) (Rouleau et al. 2021). This problem is caused by the existing business-oriented approach to financial risk management in entrepreneurship. The essence of this approach is as follows: financial interests of business (reduction of financial risks, achievement of the goal of profit maximization) in it are opposed to the non-financial interests of society (including consumers and employees). Due to this, entrepreneurship’s support for the SDGs is treated as contradicting its financial interests (increasing financial risks, hindering the fight against the risks, and reducing profit), especially under the conditions of economic crisis. However, according to the international experience under the conditions of the 2008 recession (Ça˘gıl and Turkmen 2017;Kabonga 2020) and under the conditions of the recession caused by the COVID-19 pandemic and the 2020–2021 lockdown (Galindo-Martín et al. 2021;Liu and Froese 2020), refusal of corporate social responsibility does not guarantee the success of crisis management, while companies that constantly support the SDGs are often less susceptible to the negative impact of a crisis and take less time to recover after it. Based on the above, the following research question is posed in this paper: Can the SDGs be supported by businesses during their financial risk management? How could the described approach be used to achieve this? Is this approach available (expedient to use) under the conditions of crisis? This paper’s goal is to develop a new (alternative) socially-oriented approach to financial risk management in entrepreneurship and prove its advantages from the positions of financial risk management and expedience of its use under the conditions of economic crisis. To achieve this goal, the three following topics are addressed in this paper: - Determining the level of financial risks and the impact of the COVID-19 pandemic and crisis on them; - Proposing a socially-oriented approach to financial risk management in entrepreneurship and outlining its specifics and advantages (compared to the business-oriented approach); - Assessing the applicability of the socially-oriented approach to financial risk management in entrepreneurship under the conditions of crisis. 2. Literature Review This paper uses the existing literature on the topic of financial risk management. In the work of Saha and Dutta (2022), the quality of management that is combined with inclusive financing and stability has a decisive role in the success of financial risk management of the business. Ayadi et al. (2022) note a large currency risk in business cycles. Shahzad et al. (2022) substantiate the intermediary role of formalization of risk management methods to counter the perceived risk of business and establish the effectiveness of an organization. Risks 2022,10, 42 3 of 18 Based on the data of the Japanese Real Estate Investment Trust Market, Mori et al. (2022) prove the necessity for risk sharing of business groups. Weber and Mü β ig (2022) substantiate the important effect of business strategy on risk disclosure and the effectiveness of financial risk management. Singh (2022) proves that business risk resilience increases with the help of risk management infrastructure. The influence of economic crises that preceded the COVID-19 crisis on financial risk management has also been thoroughly studied in the publications of Aloui et al. (2019), Barontini and Taglialatela (2021), Bratis et al. (2020), Chaivisuttangkun and Jiraporn (2021), Hu (2020), Lippi and Rossi (2020), and Machokoto et al. (2021). Corporate social responsibility, as a mechanism of the support of the SDGs in business, was considered in the works of Pérez et al. (2020), Shayan et al. (2022), Sinha et al. (2021), Sinkovics et al. (2021), Waheed and Zhang (2022), and Wentzel et al. (2022). Corporate social responsibility, as a mechanism of the support of the SDGs in business and the core of the proposed socially-oriented approach to financial risk management in business, has been studied from the positions of its contribution to firm value in the works of Berkman et al. (2021), Kharlanov et al. (2022), Popkova and Sergi (2021), and Vagin et al. (2022). Servaes and Tamayo (2013) show that corporate social responsibility and firm value have a positive connection in the case of companies with high customer awareness. Harjoto and Laksmana (2018) write that a stronger manifestation of CSR is associated with smaller deviations from the optimal level of risk adoption. Arslan-Ayaydin and Thewissen (2016) state that energy sector companies with good environmental performance have better financial results compared to energy sector companies with bad environmental performance. Despite the significant contribution of corporate social responsibility to the financial risk management of the business, the works of Bae et al. (2021), Havlinova and Kukacka (2021), and Zhang et al. (2022) note that the level of this responsibility is reduced during crises. This is treated by Liang et al. (2022), Lopata and Rogatka (2021), and Magrizos et al. (2021) as a normal reaction of business to the crisis—it is considered that the contribution of corporate social responsibility to the financial risk management of business amid a crisis is reduced (its manifestation is weak). The theoretical framework of this paper is, first, based on the theory of corporate social responsibility. This theory notes an important contribution of corporate social responsibility to support the SDGs in entrepreneurship, which is described in the works of He et al. (2021), Khan et al. (2021), Popkova and Sergi (2021), and Yankovskaya et al. (2021). Second, it considers the theory of financial risk management in entrepreneurship. This theory suggests a business-oriented approach to financial risk management in entrepreneurship. The essence of the existing approach consists in treating financial risks as a critical threat to business and in striving for their reduction, regardless of other risks. This is noted in the works of Jiang and Feng (2021), Kruger et al. (2021), Safta et al. (2021), and Zizi et al. (2021). In the light of the foregoing, the business-oriented approach to financial risk management in entrepreneurship is visualized in Figure 1. According to Figure 1, the business-oriented approach to financial risk management in entrepreneurship supposes that the interests of entrepreneurship and the interests of society (including company employees) contradict each other. Entrepreneurship and society oppose each other in the market economy. Companies use society to make profit: to exploit employees’ labor and impose products that do not conform to consumer preferences— i.e., create unprofitable conditions of labor and purchase of products. Society is forced to perform transactions with entrepreneurship: employees agree to unfavorable labor conditions (without any alternative), and consumers agree to products that do not conform to their requirements to quality and/or price. The SDGs are supported in society and reflect its interests. Entrepreneurship supports the SDGs through the manifestation of corporate social responsibility. The economic crisis is considered to be more important than the SDGs. A crisis increases the financial risks of entrepreneurship and paralyzes initiatives in the sphere of corporate social responsibility— Risks 2022,10, 42 4 of 18 support for the SDGs in entrepreneurship during a crisis is stopped (restored after the end of the crisis). The only beneficiary in this approach is entrepreneurship, while society suffers losses, which are increased manifold amid a crisis. Not only does a crisis limit the opportunities for implementing government programs in the sphere of sustainable development and the practice of corporate consumption, but it also leads to entrepreneurship’s refusal to support the SDGs. Risks 2022, 10, x FOR PEER REVIEW 4 of 19 labor conditions (without any alternative), and consumers agree to products that do not conform to their requirements to quality and/or price. Figure 1. The business-oriented approach to financial risk management in entrepreneurship. Source: authors. The SDGs are supported in society and reflect its interests. Entrepreneurship supports the SDGs through the manifestation of corporate social responsibility. The economic crisis is considered to be more important than the SDGs. A crisis increases the financial risks of entrepreneurship and paralyzes initiatives in the sphere of corporate social responsibility—support for the SDGs in entrepreneurship during a crisis is stopped (restored after the end of the crisis). The only beneficiary in this approach is entrepreneurship, while society suffers losses, which are increased manifold amid a crisis. Not only does a crisis limit the opportunities for implementing government programs in the sphere of sustainable development and the practice of corporate consumption, but it also leads to entrepreneurship’s refusal to support the SDGs. According to the described theories, corporate social responsibility is a source of the decrease of business risks. Since financial risks of business cannot be reduced through corporate social responsibility, its manifestation during the management of these risks is inexpedient, since it does not provide advantages in the short term (tactically). A crisis is treated as a phase of the economic cycle, characterized by high (and growing) financial risks; it is thus unfavorable for the manifestation of corporate social responsibility due to the impossibility of gaining advantage for the business. Here the uncertainty (research gaps) regarding the following issues emerges: − Whether long-term (strategic) advantages of the manifestation of corporate social responsibility during financial risk management could be obtained (first gap); − If they could be obtained, how is it possible (using which approach) to obtain them, since the existing business-oriented approach to financial risk management of entrepreneurship fully excludes the manifestation of corporate social responsibility in the process of this management (second gap); − If the appropriate approach is identified, whether it is possible to obtain long-term (strategic) advantages of the manifestation of corporate social responsibility during financial risk management in an economic crisis (third gap). These research gaps are filled in this paper with the help of developing a socially-oriented approach to financial risk management as the basis of support for the SDGs in forced transactions using to make profit Entrepreneurship −interests of entrepreneurship. Society −interests of society (including company employees). interests are contradictory opposition financial risks Economic crisis Sustainable Development Goals are supported reflect support through CSR paralyzation significance Figure 1. The business-oriented approach to financial risk management in entrepreneurship. Source: authors. According to the described theories, corporate social responsibility is a source of the decrease of business risks. Since financial risks of business cannot be reduced through corporate social responsibility, its manifestation during the management of these risks is inexpedient, since it does not provide advantages in the short term (tactically). A crisis is treated as a phase of the economic cycle, characterized by high (and growing) financial risks; it is thus unfavorable for the manifestation of corporate social responsibility due to the impossibility of gaining advantage for the business. Here the uncertainty (research gaps) regarding the following issues emerges: - Whether long-term (strategic) advantages of the manifestation of corporate social responsibility during financial risk management could be obtained (first gap); - If they could be obtained, how is it possible (using which approach) to obtain them, since the existing business-oriented approach to financial risk management of entrepreneurship fully excludes the manifestation of corporate social responsibility in the process of this management (second gap); - If the appropriate approach is identified, whether it is possible to obtain long-term (strategic) advantages of the manifestation of corporate social responsibility during financial risk management in an economic crisis (third gap). These research gaps are filled in this paper with the help of developing a sociallyoriented approach to financial risk management as the basis of support for the SDGs in entrepreneurship and substantiating its long-term (strategic) advantages and applicability amid a crisis. Risks 2022,10, 42 5 of 18 3. Materials and Methods The goal of the paper predetermined the logical structure and methodology of the research. The level of financial risks and the impact of the COVID-19 pandemic and crisis on them are determined in the following way: 1. Systematization of entrepreneurship’s financial risks and determination of the corresponding statistical indicators; 2. Calculation of the change of the indicators in 2019 compared to 2018 (before the pandemic and crisis), and in 2020 compared to 2019 (amid the pandemic and crisis) with the help of horizontal analysis; 3. Qualitative treatment of the level of risk amid the COVID-19 pandemic and crisis. First, from the position of the value of the risk, which could be as follows: - Zero (risk is absent), if there is no negative dynamics of the indicator’s change amid the pandemic; - Low, if negative dynamics of the indicator’s change amid the pandemic do not exceed 5% (in absolute value); - Moderate, if negative dynamics of the indicator’s change amid the pandemic are in the range of 5–10% (in absolute value); - High, if negative dynamics of the indicator’s change amid pandemic exceed 10% (in absolute value). Second, from the positions of the pandemic’s impact on the change of risk, which could be as follows: - Caused by the COVID-19 pandemic and crisis, if the dynamics of the indicator’s change were positive before the pandemic, but became negative during the pandemic; - Increased by the COVID-19 pandemic and crisis, if the dynamics of the indicator’s change before the pandemic had been negative and further grew during the pandemic. This research was performed based on the materials of the World Bank (2021) and International Monetary Fund (2021) since these are reliable and respectable sources of international financial statistics. The research was performed based on the statistics for 2018–2020 broken down by three categories of countries: - Underdeveloped countries (way behind developed and developing countries, with a slow rate of economic development); - Developing countries (slightly behind developed countries, with a fast rate of economic development); - Developed countries (OECD). Five countries from each designated category were considered; the criteria of their inclusion in the sample were as follows: first, the highest (in their categories) value of GDP per capita growth in 2020 (annual percentage) in 2020, according to World Bank (2021). Second, availability of data for most of the indicators. The indicators that characterize the financial risks of entrepreneurship are as follows: Domestic credit to the private sector (% of GDP) and lending interest rate (%) (credit risks: Table 1); market capitalization of listed domestic companies (percentage of GDP) and inflation, consumer prices (annual percentage) (monetary risks: Table 2); total investment (percentage of GDP) and gross national savings (percentage of GDP) (market-determined risks: Table 3). The data of the horizontal analysis were aggregated (their arithmetic means were calculated) for each category of countries. The advantage of performing the research based on the categories of countries is consideration of their specifics, as well as the possibility to assess the scale of financial risks of entrepreneurship (whether they are peculiar for the entire world economy or separate categories of countries, and which exactly). Risks 2022,10, 42 6 of 18 Table 1. Statistics characterizing credit risks in the highlighted categories of countries in 2018–2022. Category of Countries Country GDP per Capita Growth in 2020 (Annual %) Domestic Credit to the Private Sector (% of GDP) Lending Interest Rate (%) 2018 2019 2020 2018 2019 2020 Underdeveloped countries Macao SAR, China −56.9 113.39 119.51 280.34 5.29 5.36 5.26 Maldives −33.2 31.65 32.01 49.02 10.68 11.52 11.60 Fiji −19.6 92.80 100.67 123.83 5.68 6.03 6,19 Panama −19.2 87.04 87.06 107.97 6.88 7.09 7.01 Dominica −16.9 47.49 43.01 57.14 7.81 7.54 6.94 Developing countries Philippines −10.8 47.56 47.97 51.89 6.12 7.10 no data Kyrgyzstan −10.5 23.37 24.61 28.46 19.51 19.00 17.04 Mexico −9.2 34.55 36.57 38.66 8.04 8.43 6.34 India −8.9 50.37 50.13 55.25 9.45 9.47 9.15 Colombia −7.8 49.57 51.50 54.08 12.11 11.77 9.85 Developed countries (OECD) Spain −11.2 99.57 94.68 108.52 no data no data no data UK −10.3 134.63 133.53 146.45 no data no data no data Italy −8.6 76.71 74.28 83.58 2.68 2.60 2.33 Greece −8.2 91.66 80.93 82.09 no data no data no data France −8.1 104.27 107.12 122.45 no data no data no data Source: Compiled by the authors based on World Bank data (2021). Table 2. Statistics characterizing monetary risks in the highlighted categories of countries in 2018– 2022. Category of Countries Country Market Capitalization of Listed Domestic Companies (% of GDP) Inflation, Consumer Prices (Annual %) 2018 2019 2020 2018 2019 2020 Underdeveloped countries Macao SAR, China no data no data no data 3.01 no data no data Maldives no data no data no data −0.13 0.22 −1.37 Fiji no data no data no data 4.08 1.77 −2.60 Panama 24.10 25.86 26.33 0.76 −0.36 −1.55 Dominica no data no data no data 0.99 1.50 no data Developing countries Philippines 74.43 7.06 75.46 5.21 2.48 2.64 Kyrgyzstan no data no data no data 1.54 1.13 6.33 Mexico 31.50 32.60 37.13 4.90 3.64 3.40 India 84.50 79.67 98.95 3.95 3.72 6.62 Colombia 31.07 40.83 39.18 3.24 3.53 2.52 Developed countries (OECD) Spain 50.95 57.23 59.24 1.68 0.70 −0.32 UK no data no data no data 2.29 1.74 0.99 Italy no data no data no data 1.14 0.61 −0.14 Greece 18.09 26.13 26.92 0.63 0.25 −1.25 France 84.81 no data no data 1.85 1.11 0.48 Source: Compiled by the authors based on World Bank data (2021). Risks 2022,10, 42 7 of 18 Table 3. Statistics characterizing market-determined risks in the highlighted categories of countries in 2018–2022. Category of Countries Country Total Investment (Percentage of GDP) Gross National Savings (Percentage of GDP) 2018 2019 2020 2018 2019 2020 Underdeveloped countries Macao SAR, China 17.213 14.120 27.605 no data no data no data Maldives 20.000 20.000 20.000 −8.386 −6.451 −9.925 Fiji 20.358 19.942 18.358 no data no data no data Panama 41.453 39.292 28.547 33.803 34.302 30.876 Dominica 32.031 23.373 20.998 −10.344 −14.499 −3.498 Developing countries Philippines 27.151 26.402 17.383 24.591 25.593 20.973 Kyrgyzstan 27.734 26.370 18.648 15.682 14.270 23.155 Mexico 22.711 21.166 19.307 20.658 20.856 21.739 India 32.070 30.664 29.278 29.953 29.809 30.180 Colombia 21.195 21.509 19.011 17.105 17.023 15.576 Developed countries (OECD) Spain 20.478 20.890 20.691 22.408 23.026 21.379 UK 17.765 18.340 17.221 14.084 15.246 13.508 Italy 18.529 18.011 17.500 21.040 21.216 21.048 Greece 13.337 12.689 13.450 9.766 10.456 6.029 France 23.857 24.365 23.676 23.026 24.074 21.777 Source: Compiled by the authors based on World Bank data (2021). Mathematical tools were used to check the given hypotheses. The data for 2018–2020 were unified in a common data array (45 observations) for each indicator. The method of regression analysis was used to find the dependence of the indicators of financial risks (from Tables 1–3) on the Sustainable Development Index. The statistics on this index in the distinguished categories of countries in 2018–2020 are given in Table 4. Table 4. Statistics on sustainable development in the distinguished categories of countries in 2018– 2020. Category of Countries Country Sustainable Development Index, Score 0–100 2018 2019 2020 Underdeveloped countries Macao SAR, China 70.1 73.2 73.89 Maldives 0 72.1 67.59 Fiji 0 70.1 69.95 Panama 64.9 66.3 69.19 Dominica 0 0 0 Developing countries Philippines 65 64.9 65.5 Kyrgyzstan 70.3 71.6 73.01 Mexico 65.2 68.5 70.44 India 59.1 61.1 61.92 Colombia 66.6 69.6 70.91 Developed countries (OECD) Spain 75.4 77.8 78.11 UK 78.7 79.4 79.79 Italy 74.2 75.8 77.01 Greece 70.6 71.4 74.33 France 81.2 81.5 81.13 Source: Created by the authors based on UNDP data (2021). Risks 2022,10, 42 8 of 18 For the econometric modeling, the indicators were assigned symbols. Financial risks— Risk fin ; the Sustainable Development Index, as a factor that has a potential influence on them—SDGind. The research model of this paper has the following form: Riskfin =α+β×SDGind (1) In Equation (1) α is the constant, and β is the coefficient of regression, which shows the character of the connection between variables. The reliability of the results of the regression analysis was checked with the help of multiple R (correlation coefficient), significance F, and t-Stat. The hypothesis was proved if, for most of the indicators of financial risks, their positive dependence (corresponding values of the coefficients of regression) on the Sustainable Development Index was discovered, but the connection between the indicators was weak and/or insufficiently reliable. This is proof of the potential of sustainable development to reduce financial risks, but the impossibility of developing this potential using the current business-oriented approach to managing the financial risks in entrepreneurship. This is an argument in favor of the transition to a new socially-oriented approach to managing the financial risks in entrepreneurship. For the demonstration of the socially-oriented approach to financial risk management in entrepreneurship, we used the graphical method (visualization). To identify its specific features and advantage, we used the method of comparative analysis to compare the proprietary approach to the business-oriented approach. To assess the applicability of the socially-oriented approach to financial risk management in entrepreneurship during a crisis we used the method of SWOT analysis, since it allows for the systemic determination and consideration of the strengths, weaknesses, opportunities, and threats of the new approach and compiling the most comprehensive and correct opinion of it. 4. Results To determine the level of financial risks and the impact of the COVID-19 pandemic and crisis on them, we conducted a horizontal analysis of the data from Tables 1–3; its results were systematized and critically reconsidered (scientific treatment is provided), as shown in Table 5. As shown in Table 5, the first distinguished financial risk of entrepreneurship is connected to the deficit of financial resources and forced increase in loan assets. The indicator of this risk is domestic credit to private sector (percentage of GDP). The negative dynamics of this indicator envisage its increase; it has been determined in: - Underdeveloped countries, where domestic credit to the private sector grew in 2019 (in comparison with 2018) by 1.12% (the risk was present before the pandemic, but it was low), and in 2020 (in comparison with 2019) by 53.52% (the risk grew manifold during the pandemic); - In developing countries, where domestic credit to the private sector grew in 2019 (in comparison with 2018) by 3.09% (the risk was present before the pandemic, but it was low), and in 2020 (in comparison with 2019) by 8.95% (the risk grew to the moderate level during the pandemic); - In developed countries, where domestic credit to the private sector in 2019 (in comparison with 2018) demonstrated positive dynamics (9.357%, i.e., there was no risk before the pandemic), and in 2020 (in comparison with 2019) grew by 10.51% (high risk emerged during the pandemic). Given this, there is a high risk of deficit of financial resources and a forced increase in loan assets, which were caused by the COVID-19 pandemic and crisis and are most evident in underdeveloped countries. Risks 2022,10, 42 15 of 18 with the help of corporate social responsibility. In the new approach, the beneficiaries are entrepreneurship (reduction of financial risks, increased robustness against crisis) and society (business covers society’s losses that are caused by the crisis). The crisis still limits opportunities for implementing government programs in the sphere of sustainable development and the practice of corporate consumption, but support for the SDGs in entrepreneurship allows compensating for losses, preserving the achieved results, and the rate of sustainable development. Unlike the existing studies of financial risk management in entrepreneurship, in particular, the works Jiang and Feng (2021), Kruger et al. (2021), Safta et al. (2021), and Zizi et al. (2021), the socially-oriented approach to financial risk management in entrepreneurship does the following: - Provides long-term (strategic) advantages of the manifestation of corporate social responsibility during financial risk management: (1) stability and consistency of corporate culture, its harmonious combination with the practice of crisis management of responsible business; (2) invariable high competitive advantages in loyalty (thus filling the first gap); - Implies the manifestation of corporate social responsibility in the process of financial risk management of entrepreneurship, i.e., provides continuous support for the SDGs in the business environment (thus filling the second gap); - The described long-term (strategic) advantages of the manifestation of corporate social responsibility during the management of financial risks could be obtained during an economic crisis (thus filling the third gap). Thus, the developed socially-oriented approach to financial risk management is the alternative to the business-oriented approach; it forms the basis for support for SDGs in entrepreneurship (continuously, including in a crisis), fills all research gaps, allows for the achievement of long-term (strategic) advantages, and raises the effectiveness of financial risk management of entrepreneurship during a crisis. 6. Conclusions This paper has provided a scientifically substantiated answer to the proposed research question and demonstrated that the SDGs could be supported by business during financial risk management. Toward this aim, a socially-oriented approach to financial risk management in entrepreneurship has been developed and is offered for use during economic crises. As a result of the performed research, it has been established that the level of financial risks and the impact of the COVID-19 pandemic and crisis on them are high; we have determined the following: - High risk of a deficit of financial resources and forced increase in loan assets caused by the COVID-19 pandemic and crisis—this is most evident in underdeveloped countries. - Moderate risk of reduction of market capitalization of business, further increased by the COVID-19 pandemic and crisis—this is most evident in underdeveloped and developed countries. - High risk of growth of purchasing prices (prime cost), caused by the COVID-19 pandemic and crisis—this is most evident in developing countries. - The high risk of a deficit of investments, further increased by the COVID-19 pandemic and crisis—this is most evident in developing countries. - High risk of reduction of the volume of effective demand, caused by the COVID-19 pandemic and crisis—this is most evident in developing countries. The increased level of most financial risks due to the COVID-19 pandemic and crisis in 2020 shows that the business-oriented approach is characterized by low effectiveness and does not allow coping with financial risks in entrepreneurship; this is true for all categories of countries (including developed countries). A prospective alternative is the new socially-oriented approach, the specific features of which are as follows: Risks 2022,10, 42 16 of 18 - Establishing society’s interests as primary (key) interests, which ensure the achievement of the interests of both the economy and society; - Peripheral place of financial risks in the system of business risks; - The priority of financial risk management is the preservation of corporate knowledge and a positive image; - Prospective measures of financial risk management are recommended; they include optimization of business processes to reduce expenditures, preservation of responsible innovations, flexible pricing policy given the specifics of the categories of consumers, and preservation or equal reduction of quality and prices. Its advantages (as compared to the business-oriented approach) from the position of financial risk management are, first, stability and consistency of corporate culture and its harmonious combination with the practice of crisis management of the responsible business, and second, invariable high competitive advantages in loyalty; these advantages predetermine the expedience of its use in an economic crisis. The theoretical value of this paper consists in the offering and scientific substantiation of a new hypothesis: that the SDGs could and should be continuously supported by business during financial risk management with the help of the socially-oriented approach, which is accessible and expedient for use in an economic crisis. The practical value of the obtained results consists in the following: the developed new (alternative) socially-oriented approach to financial risk management in entrepreneurship allows increasing the effectiveness of financial risk management in entrepreneurship and raising its robustness against the current COVID-19 crisis. The social importance of the conclusions and obtained results is that the developed new (alternative) socially-oriented approach to financial risk management in entrepreneurship allows for and stimulates continuous support for the SDGs in entrepreneurship during the entire economic cycle, including the phase of the crisis. This allows for the maximization of achievements in the sphere of sustainable development and the increase in its rate. The obtained results are limited by the hypothesis since its testing was complicated due to the deficit of isolated, full-scale, and compatible (for different years) statistics on support for the SDGs in entrepreneurship during a long period that would cover various phases of an economic cycle. During the period of the 2000 financial crisis, the SDGs were not yet adopted, and there were no statistics on them, and under the conditions of the current recession caused by the COVID-19 pandemic and lockdown in 2020–2021, there is a deficit of factual data and a lack of experience (the crisis continues) to compare data from a different phase of the economic cycle (comparison will be possible only when the crisis ends). Future studies should be devoted to the compilation of an empirical base (official statistics and alternative data) on support for the SDGs in entrepreneurship, the approbation of the developed socially-oriented approach to financial risk management in entrepreneurship, and verification of the proposed hypothesis. Author Contributions: Writing—original draft, A.N.Z., M.V.K., A.V.B., S.M.S., T.M.R. and S.V.P.; Writing—review & editing, A.N.Z., M.V.K., A.V.B., S.M.S., T.M.R. and S.V.P. All authors have read and agreed to the published version of the manuscript. Funding: This research received no external funding. Institutional Review Board Statement: Not applicable. Informed Consent Statement: Not applicable. Conflicts of Interest: The authors declare no conflict of interest. Risks 2022,10, 42 17 of 18 References Aloui, Mouna, Bassem Salhi, and Anis Jarboui. 2019. Market risk, corporate governance, and the regulation during the recent financial crisis: The French context. 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