This post introduces an excellent overview of the factors which influence multinational enterprises (MNEs) commitment to reach the Sustainable Development Goals (SDGs) by Jan Anton van Zanten and Van Tulder.
According to the authors, governments not only impose policies to regulate MNEs’ behaviors, but also work together with MNEs to shape institutions, which include the development of policy agendas. An example of this public–private partnership in institution building is the United Nations’ establishment of the Sustainable Development Goals (SDGs) in 2015.
On the one hand, corporations were among the key stakeholders that were consulted for the formulation of the 17 Global Goals. On the other hand, active corporate engagement in moving towards the SDGs is repeatedly emphasized as a prerequisite for successful implementation of the SDGs.
Building on institutional theory, Van Zanten and Van Tulder argue that the engagement of MNEs is influenced by both the specific SDGs and the characteristics of MNEs.
First, MNEs are more likely to address sustainability challenges for which they can be held normatively accountable. This includes those actionable SDGs that firms can internally address within their own value chains (e.g., reduce corruption), and those ethical SDGs that focus on avoiding harm (e.g., minimize pollution). Second, MNEs which originate from certain countries and operate in particular industries are more likely to commit to sustainability actions than others. This includes MNEs from countries with precautionary principles (e.g., European countries) which are more likely to be held normatively accountable for addressing sustainable challenges than others. It also comprises MNEs that operate in industries which are associated with direct negative social and environmental impacts (e.g., mining).
Using a survey of 81 FT Global 500 companies, the authors provide empirical findings in line with these predictions.