“Corporate social responsibility of financial sector institutions in the light of sustainable development goals financing: the role of banks and stock exchanges”

Significant gap in investment resources for financing Sustainable Development Goals can be overcome with the revitalization of the corporate social responsibility mechanism of the financial sector institutions, for example banks and stock exchanges as the largest players in the global financial sector. The most relevant for them are Goals 1, 5, 8, 10, 13, 17. Incorporating these goals into activities of the financial sector institutions requires not only the activation of their CSR mechanism in the directions indicated by the targets, but also the radical restructuring of all business processes and the reorientation of their overall sustainability strategy. Analysis of current sustainability reporting disclosure by financial sector institutions in global and regional aspects was conducted. Based on the analysis, the authors define the role of CSRs of banks and stock exchanges in SDG financing as follows: banks – ensuring their own sustainability and efficiency through CSR mechanisms, formation of new tools, methods and technologies of financial support of SDG; stock exchanges – minimization of information asymmetry in investor decision making, taking into consideration ESG criteria, formation of exemplary disclosure practices and new markets and market benchmarks by listing companies. opportunities in developing countries. All financial players must work together to create a mechanism for implementing these opportunities. The corporate social responsibility (CSR) of financial sector institutions as a holistic mechanism for responsible management of their activities is directly aimed at realizing such investment opportunities, overcoming key barriers to financing the SDG and eliminating the global investment gap of USD 5 to 7 trillion annually, including USD 3.3 to 4.5 trillion in developing countries. Developing countries face USD 2.5 trillion annual investment gap in key sustainable development sectors.


INTRODUCTION
In overcoming the consequences of the global 2007-2009 financial crisis, the Paris Agreement on Climate Agreements and the United Nations Sustainable Development Goals (SDGs UN 2030 Agenda and Sustainable Development Goals) mark new milestones in the development of the financial sector, the role of which is transformed due to the emergence of new investment opportunities. So, according to Ban Ki-moon, "green finance" offers extraordinary unlimited investment opportunities in developing countries. All financial players must work together to create a mechanism for implementing these opportunities.
The corporate social responsibility (CSR) of financial sector institutions as a holistic mechanism for responsible management of their activities is directly aimed at realizing such investment opportunities, overcoming key barriers to financing the SDG and eliminating the global investment gap of USD 5 to 7 trillion annually, including USD 3.3 to 4.5 trillion in developing countries. Developing countries face USD 2.5 trillion annual investment gap in key sustainable development sectors.
Among the key barriers to financing the SDG are: • the necessity to integrate a negative ecological externalities and ESG criteria into the practice of making investment decisions in the financial sector and market practice; • consideration of new investment opportunities and their features in the strategy and tactics of the activities of financial institutions; • formation of new competencies, types of sustainable development financing and its goals; • overcoming information asymmetry among the investment process participants: forming common approaches to information disclosure and understanding ESG criteria; • reorientation of financial instruments for longer-term financing. According to the High Level Expert Group established by the European Commision, to reach the SDG only in EU it will need 180 billion euro annually, for which the European Fund for Strategic Investments has been created. However, the scale of investment challenges is beyond the capabilities of the public sector and requires the active involvement of financial sector institutions.
The inclusion of Ukraine in the SDG and the formation of a national system of their targets by 2030 will require a detailed analysis of the global experience in functioning of the CSR mechanism of the financial sector institutions and development of directions for its implementation.
The aim of this research is to study the significance of CSR mechanisms of financial sector institutions (for example, banks and stock exchanges) in implementation of investment opportunities for financing UN SDGs.
The role of CSRs of banks and stock exchanges as the largest players in the global financial sector aimed at overcoming investment barriers on the way to the SDG can be indicated as follows: 1) banks -ensuring their own sustainability and efficiency through CSR mechanisms with indirect influence on financial stability and achievement of sustainable development, formation of new tools, methods and technologies of financial support for SDG; 2) stock exchanges -minimization of information asymmetry in investor decision making, taking into account ESG criteria, formation of exemplary disclosure practices by listing companies in view of their progress in achieving the SDG and the specified criteria and monitoring the market environment for new SDG financial support instruments (green bonds).
The article is structured as follows: overview of normative sources on international and national level, scientific works in the field of regulation of CSR of financial sector institutions (Section 1); methods (Section 2); analysis of world experience in functioning of the CSR mechanism of the financial sector institutions in financing the SDG (Section 3); conclusions and perspectives for Ukraine.

Legal framework of the CSR mechanism of the financial sector institutions
A thorough study of the concept of "corporate social responsibility" (CSR) has taken place since the beginning of the twentieth century. During this time, the concept of CSR has evolved substantially and has become widespread from isolated cases to systemic implementation in most areas of activity.
There is no exception to the financial sector, where CSR has a significant impact on the strategy of financial institutions. The global financial crisis has shifted the emphasis on the strategy of the financial sector institutions to strengthen the responsibility for regulators and consumers of financial services; the adoption of the SDG -towards of increasing responsibility to all stakeholders.
At the international and national level, a number of normative documents and standards have been developed that regulate the functioning of the CSR mechanisms of the financial sector institutions. Among the key requirements that are common and cross-sectoral, one can refer to the 10 United Nations Global Compact Principles (UNGC) signed by most of the leading financial institutions. The International Standardization Organization proposes to use the ISO 26000 standard: 2010 "Social Responsibility Guideline", which discloses all aspects of the social responsibility of business entities in any field of activity, ranging from the interpretation of concepts, disclosure of the concept and key concept aspects, and ending with recommendations on the social responsibility implementation and examples of key successful practices. The following standards for disclosure and interaction with stakeholders are also widely used: GRI (Social Reporting Standard for a Three-Way Sustainability Concept), AA1000 series (a set of recommendations and principles for preparing social reports based on dialog with stakeholders; key principles: comprehensive, substantive, and responsive). A series of standard certificates SA 8000 is intended for certification of organizations in labor relations. 3) suggestions for the development of comparative benchmarks for the carbon footprint of investments.

CSR of financial sector institutions in the works of scholars
The role of CSR for financial sector institutions is often analyzed geographically by scientists. The features of CSR in the financial sector of individual countries were studied by Khan (2009)  Along with the aforementioned, leading world experts and scientists use various economic and mathematical methods and models to assess the impact of the CSR mechanism on the activities of financial institutions and their indirect influence on the achievement of sustainable development. Such an influence is analyzed within the framework of three possible options for the establishment of relations: 1) the negative influence, based on the theory of corporate selfishness by Friedman (1970), which argues about the necessity to maximize profits; 2) the positive influence, based on significant achievements of leading scientists and specialists, as well as empirical research; 3) the neutral/the Missing Communication (Soana, 2011).
Many scientists have dedicated their research to the impact of CSR on various aspects of banking business. In particular, Scholtens (2009) declares a positive and significant link between CSR and financial performance, as well as the size of the bank, by analyzing socially responsible (ethics codes, CSR reports, environmental management, responsibility of financial products, social conduct) activity of 32 international banks of three major regions -Europe, North America and Asia Pacific. Banks, as financial intermediaries, significantly impact society while implementing their primary functions such as pricing and valuing financial assets, monitoring borrowers and managing financial risks (Scholtens, 2009).
The positive link between financial performance of banks (return on assets, return on equity, net interest income, and non-interest income) and CSR has been empirically confirmed by Wu  The study of the role of exchanges as the largest intermediary organizations, which are shaping the market environment for the realization of investment opportunities for sustainable development in the researches of scientists is presented less widely than banking institutions. The analyzed works can be grouped as: • studying the importance of stock exchanges in overcoming market externalities, raising transparency and disclosing information relative to the ESG criteria for making more informed investment decisions (Myklebust, 2013), assessing the value of exchanges in supporting the initiatives of Sustainable Development with the Sustainability Support Index ( Thus, among scientific sources, the priority is the study of banks' impact on sustainable development in the context of their own efficiency and maintaining financial sustainability through CSR mechanisms, taking into consideration new investment opportunities and their peculiarities in the strategy and tactics of financial institutions activities; while the impact of stock exchanges is analyzed through the creation of best market practices and opportunities for investment decisions based on ESG criteria. However, it should be noted that most of the papers analyzed do not consider the role of CSR of financial sector institutions after the adoption of the SDGs in 2015, which requires a separate study.

METHODS
The concepts of sustainability, corporate social responsibility and corporate governance as well as stakeholder theory have made theoretical and methodological basis of the study.
Stakeholder theory is a key point in investigating the CSR mechanism for the financial sector institutions because of specific information expectations and requests of such institution key stakeholders. These requests determined the directions of the CSR mechanism realization, varied significantly under sustainability and observed related to each SDG, specific to banks and stock exchanges.

RESULTS AND DISCUSSION
The peculiarities of the CSR mechanism implementation in the financial sector are primarily determined by the information expectations and requests of their key stakeholders, which are specific to the sector. Among the main stakeholders of the financial sector institutions, it is advisable to highlight the following: external (clients, central banks, other financial regulators, other banks, unions, non-profit organizations, public authorities) and internal (shareholders, managers, staff). In addition, the definition of the most relevant SDGs for CSR activities in financial institutions, in particular banks and exchanges, remains a controversial issue.

Responsiveness and accountability in its CSR
The analysis of the two named documents of GRI allowed to select the priority goals for financial institutions with their gradation into two categories: SDGs, which are inherent for the internal activities of such institutions, and SDGs, which are related to the provision of financial services and the sale of financial products (Tables 1 and 2).
Thus, SDGS 5 and 12 are the most relevant for the operational practices of banks and exchanges; SDGs 1, 5, 8, 10, 13, 17 for financing of sustainable development. Incorporation of these goals into activities of the financial sector institutions not only requires the activation of their CSR mechanism in the directions indicated by the targets, but also the radical restructuring of all business processes and the reorientation of their overall strategy in the context of sustainable development.
In view of this, the priority areas for the implementation of CSR mechanism of banking institutions aimed at achieving the goals related to the provision of financial services and the sale of financial products, are as follows:   • facilitating financial literacy and awareness, financial education, shaping an information field for the stakeholders interaction; • providing transparent and equitable financial products and services, establishing specific conditions for their provision to low-income individuals, and micro-credit conditions for people with disabilities (for individuals); creating favorable lending regime for small and medium enterprises taking the ESG criteria into account; • formation of lending standards for a wide range of clients, taking into consideration ESG criteria and principles for responsible investment, promotion of green and energy efficient loans.
These areas of CSR influence are primarily specific to the financial activities of banking institutions and create additional benefits and positive effects on their financial and economic efficiency, as indicated in a number of research studies. Among these areas, the International Finance Corporation mentions a reducting the cost of raising capital, raising the value of the banking brand, rating of the banks solvency and improving the conditions for the bank risk insurance.
If these priority directions of the SDGs achievement are common to banks and stock exchanges, the directions of achieving the goals, which are inherent in the internal activities of financial institutions, in particular the increase of transparency and coverage of CSR, are somewhat different.
Reporting on sustainable development by banking institutions is purely reputational, personalized, and the reports themselves are addressed to a certain stakeholder group or reveal progress in reaching certain SDGs by the bank.
At the same time, stock exchanges use reporting on sustainable development, the formation of market benchmarks and sustainable development indices, primarily for the establishment of listing conditions for issuers, and not only for the coverage of their own activities.
The consolidation of these CSR exposure guidelines for stock exchanges for sustainable development fi- The reasons for such a dynamics of the number of reports can be: 1) restructuring old activity according to the SDGs and its disclosure in the reports on sustainable development has a certain lag; 2) the intensification of efforts by financial sector entities in reporting on sustainable development after the global 2007-2009 financial crisis is explained by the emergence of more stringent regulatory requirements for the transparency and disclosure of information by such institutions and the formation of new, more competitive strategies; 3) some reduction in the number of reports on the sustainable development of financial sector institutions (by 5.7%) in 2017 is due to a certain time lag in publishing such reports, as well as a possible two-year reporting cycle of institutions.
In addition to the dynamics analysis, the analysis of the regional cut of the number of sustainable development reports submitted by the financial sector institutions in 2000-2017 allows us to confirm the upward trend of this indicator in all six regions of the world. In particular, the significant increase in the number of reporting entities in the African region in 2011 was due to the Johannesburg Stock Exchanges' (SA) adoption of a compulsory submission of the

CONCLUSION
The necessity to attract significant financial resources to finance the SDGs as well as to overcome the effects of climate change requires rethinking the role of institutions in the financial sector and their CSR mechanisms and ensuring the integration of ESG criteria into the practice of making investment decisions in the financial sector, taking into account new investment opportunities and developing new investment products, overcoming information asymmetry between participants in the investment process.
This role lies within a broad legal framework, which includes both internationally recognized cross-sectoral and specific for financial sector and recommendations on CSR, as well as national regulatory documents. Most of the documents were adopted to overcome the effects of the global financial crisis and ensure the financial sector sustainability.
The study of banks influence on sustainable development in the context of their own efficiency and maintaining financial sustainability through CSR mechanisms, prevails in academic spheres. The impact of CSR of exchanges is seen by academics in the context of creating an environment for investment decisions, which is based on ESG criteria.
Systematization of world experience in implementing the CSR mechanism by the financial sector institutions has made it possible to identify the following key areas of its impact on financing the most relevant SDGs and their targets (1,5,8,10,12,13,17) as: ensuring sustainability and efficiency through CSR mechanisms with mediated influence on financial stability and achievement of sustainable development, formation of new tools, methods and technologies of financial support of SDGs -mainly it is a bank; minimizing information asymmetry in decision-making by investors, taking into consideration ESG criteria, forming exemplary practices of disclosure by listing companies and market benchmarksmostly it is a stock exchange.
At the same time, the specified SDGs, taking into account the key requests of stakeholders of financial sector institutions and their impact on the CSR mechanism can be adjusted as follows: SDGs, which are inherent in the internal activities of such institutions, and SDGs, which are related to the provision of financial services and the sale of financial products.
The incorporation of these SDGs into the activities of the financial sector institutions requires a radical restructuring of all business processes and the reorientation of their overall strategy in the context of sustainable development. However, such large-scale tasks at the same time do not stop financial institutions. Their number, on the basis of published reports on sustainable development, grows by an average of one-third in both by years and in the regional context. Some significant growth in the reports on sustainable development in the regions of the world is due to institutional reforms of the banking system or the exchange sector of one or another country.
Ukraine does not have systematic measures to promote the development of CSR in the financial sector, which does not allow its potential to be used to finance national tasks to achieve the Sustainable Development Goals.