ESG Factors in Corporate and Social Risk Management System as an Infrastructure Element of Cross-Border Business

Abstract

The paper is devoted to the analysis of current factors of ESG (Environmental Social and Corporate Governance) sustainable development. The paper shows how the ESG agenda is implemented in practice, as well as what changes in legal regulation or behavior of investors, counterparties, consumers of products and services may be associated with it. The author examines to what extent ESG standards are included in the risk management strategy of cross-border business. The risk management system is a set of techniques and methods that allow you to accurately predict the occurrence of risk events. Risk management standards presuppose the choice of both «positive» and «negative» aspects (risks). The term «aspect» is intended to identify the consequences, probabilities of risk, its matrix in the long and short term. The most successful are the standards of the so-called best practice, most often they are called «integrated risk management».The paper highlights the chains of concluded contracts, considers the environmentally friendly management solutions embedded in them. The paper substantiates the categorical apparatus of two directions of risk management, influenced by ESG factors: social risk management and corporate risk management. The paper argues for a procreditor’s approach to the risks of improper distribution of corporate assets, the formation of valuation and regulatory capital reserves. It is shown which of the problematic debts gives rise to a corporate group of debtors-borrowers to claim and whether it is worth resorting to a foreign jurisdiction in this regard. The author admits that social risks range from such a root cause as conflicts of socially significant interests to more complex legal structures, the basis of which is formed by contradictory processes of coordination of corporate investment strategy. As a result, even the minimum legal standards detailing insurance risks are of lasting importance, with the comparability of the risks of social and credit groups.