International Business and Sustainable Development Goals: Volume 17

A cascade of crises that materialized in particular over the 2019–2022 period, increases the relevance for international business (IB) scholarship to address the following question: whether, to what extent and under what circumstances can multinational enterprises (MNEs) rescue the sustainable development goals (SDGs) and make sure that nobody is left behind in a globalized world where the opposite seems to be the case? For many MNEs, slow progress in implementing the SDGs in a more strategic and transformational manner does not necessarily hint at a lack of interest with management, but also at a lack of solid knowledge and/or experience in how to implement general development ambitions like the SDGs. This introductory chapter defines the intellectual and managerial challenges ahead. It refers to relevant efforts already done in the IB community – with reference to IB journals that issued special editions on the topic – and explains why five angles have been chosen to cluster the contributions in this volume which are also aimed to enhance further progress in the study of MNEs and the SDGs: (1) general, (2) strategic, (3) operational, (4) contextual and (5) misbehavior.

Sustainable development is a central issue for the world economy today. The United Nation’s Sustainable Development Goals (SDGs) are associated with both responsible business practices and strategic orientation for competitive advantages. While most multinational enterprises (MNEs) want to ensure that their businesses will maintain or even enhance sustainability across borders, they face enormous challenges, often due to a lack of capabilities and inefficient institutions in host countries. In the nexus between the SDGs and international business (IB) research, the contexts of emerging markets and developing countries have particular significance, because they impose complex constraints on the achievement of the SDGs. At the same time, there is a high potential for MNEs to have positive effects internationally through their sustainable practices. This chapter discusses the recent trend in IB research on sustainability by showcasing current issues addressing several interrelated SDGs. The exemplary topics touch upon child labor, innovation for social sustainability, challenges in the green transition, MNE activities associated with the pollution haven, and health and safety concerns in global supply chains. The discussion cuts across various contextual settings and calls for actions by all stakeholders, including business entities, governments, and scholars.

Sustainable development requires businesses to improve their positive and reduce their negative impacts. This chapter discusses how the impact of business on sustainable development can be measured and managed using the sustainable development goals (SDGs). First, it introduces two complementary approaches for measuring impact: a top-down approach that departs from the economic activities that companies undertake; and a bottom-up approach that defines the impacts of individual companies. Second, it argues that companies can manage their impacts on the SDGs through a nexus approach. Instead of treating SDGs as isolated silos, a nexus approach aims to advance multiple SDGs simultaneously (creating co-benefits) while reducing the risk that contributions to one SDG undermine progress on another (avoiding trade-offs).

Implementing the sustainable development goals (SDGs) has proven a significant challenge for companies. While multinational enterprises (MNEs) have shown a real intention to contribute to these goals, they face major barriers in implementing the SDGs in their core business strategies. Extant academic studies on this phenomenon have primarily explored why companies “should” address the SDG agenda but have not (yet) explored what “works,” what does not “work,” and why. Therefore, evidence of a sizable gap between intention and realization is growing. Besides, there is a limited explanation for the existence of this gap and no validated implementation models that could help overcome it. Additionally, management research remains relatively fragmented. The diversity of existing theoretical and empirical frameworks makes it difficult to consolidate scientific and practical insights on “how” to guide companies to accelerate the global goals through their core operations.

This study is one of the first attempts to draw lessons from extant research on effective SDGs’ implementation strategies. For that, we upgrade the “SDG Compass,” which has been recognized as a leading framework for SDGs implementation in companies’ core activities. A critical assessment of the literature on the SDGs implementation has been conducted through a systematic literature review (SLR) and bibliometric analysis. This has helped us identify gaps in the SDG implementation practice and accumulate relevant insights supporting a more integrated and upgraded implementation framework: the SDG Compass+. This framework can advance coordinated theoretical and practical research by identifying the antecedents and critical factors of impactful SDG implementation strategies.

Sustainability and resilience challenges persist globally due to the lack of coordinated action among firms and community stakeholders. This is even more challenging for multinational corporations (MNCs) interacting across multiple, and often diverse, institutional environments. To be effective, MNCs’ sustainability efforts must respond to interdependent functions and systems in communities and rely on adaptive governance frameworks targeting long-term initiatives. The authors highlight the importance of public–private interconnections to promote resilience and enable the achievement of the sustainable development goals (SDGs). The authors introduce a methodology to analyze community resilience and present an in-depth, single case study of New Orleans. Findings provide important insights for the international business (IB) literature, but also critical implications for policymakers and practitioners.

A number of multinational corporations are striving to implement the sustainable development goals (SDGs) framework, aiming at addressing social, environmental, and economic goals. However, integrating the three aspects of sustainability across the 17 goals is very complex; multiple conflicts and tensions might arise when aiming at addressing such diverse elements at once, which in turn might prevent firms to effectively reach sustainability outcomes. Understanding the nature of such tensions and how to overcome them is therefore a key goal to ensure achieving the SDGs effectively. Given their very nature, multinational corporations are even more likely to experience such tensions on a daily basis than other firms – current international business (IB) literature, however, have overlooked the study of how sustainability-related tensions are experienced and overcome by multinationals. With the aim to address this gap, the authors propose how IB literature can be informed by paradox theory, which in recent years has become an established lens through which to investigate and theorize how sustainability tensions, conflicts, and contradictions are experienced and managed by multinationals. Accordingly, this chapter aims to advance the IB literature by suggesting how paradox theory can be adapted as a theoretical lens to examine the SDGs-related tensions present in multinational enterprises (MNEs) in order to foster the understanding of how multinational corporations address the current major challenges that undermine societal sustainability and how they can act to support a transition to a more sustainable economy.

The purpose of this book chapter is to examine how sustainable developmental goal (SDG) implementation for sustainability transformation can be driven by the business practice of a multinational enterprise (MNE). It concerns sustainability transformation that takes place in complex environments with the engagement of different types of stakeholders from various organizations and domains. The chapter focuses on inclusive stakeholder orientation to move from a firm-centric to a societal perspective grounded in an ethical, macro-oriented, and network philosophy. The transformation is embedded in the global transformation agenda, the UN 2030 agenda, with its 17 SDGs. In this chapter, the authors assess MNEs’ role in implementing the SDGs by conceptualizing sustainability transformation practice in a business context of IKEA grounded in circular economy and circular society thinking. Implementing the SDGs strengthens the “challenge-driven transformative change.” Based on the theoretical and conceptual framework, the authors have constructed a matrix and contextualized the case of IKEA. It results in a descriptive analysis of MNE SDG implementation for sustainability transformation. The chapter has contributed a general model for a sustainability transformation practice in a business context embedded in circular economy and circular society thinking, which can utilize for challenge-driven transformative change. The new model has been redesigned for its new purpose. The model is constructed based on a new theoretical and conceptual framework and from the context of IKEA as a MNE acting as a globally integrated enterprise with a circular and societal transformation focus.

A growing number of multinational enterprises (MNEs) are engaging with the United Nation’s sustainable development goals (SDGs) and trying to link the SDGs to their foreign direct investments (FDI). They are searching for ways in which they can contribute to the economic, social, and environmental dimensions of the sustainable development of host countries while pursuing their commercial and competitive objectives, that is, creating shared value (CSV). One type of foreign direct investor that has long-standing experience with balancing profit and impact is development finance institutions (DFIs), that is, public, or semi-public institutions investing in private commercial projects in developing countries with the aim of creating impact. Through the conceptual lens of organizational theory of hybrid organizations, this chapter analyzes how the large Danish DFI Investment Fund for Developing Countries (IFU) has balanced its SDG mission with financial profitability. This balance is achieved by focusing on the SDGs as the value driver at the organizational level; by applying a portfolio perspective on the balance between SDGs and profitability; and by applying rigorous impact measurement methodologies along with financial accounting at the project level. The chapter suggests that this kind of experience from DFIs may have important implications for other foreign direct investors, such as MNEs, seeking to engage with the SDGs. It also contributes to the literature by bringing an understudied foreign direct investor, that is, DFIs, into the international business (IB) literature on SDGs and by providing a conceptual framework for analyzing how MNEs can create shared value in their FDI.

Cultural and creative industries (CCIs) have been argued to play an important role in achieving the sustainable development goals (SDGs). However, the mechanisms through which CCIs contribute to the attainment of SDGs remain underexplored. In this study, the authors adopt a network perspective to examine how the structure of a local CCI network relates to its local sustainability performance. By examining a database of 210,182 networked firms out of 1.34 million CCI firms across 294 cities in China, the authors conclude that both the scale and the density of a local CCI network improve the city’s performance in terms of attaining SDGs 8–12. The authors discuss the implications of these findings and propose future research avenues in international business.

Integration between the different components of development is a major aspiration of the 2030 agenda, but the efforts of firms that intend to contribute simultaneously to multiple development trajectories may be hindered by trade-offs that occur between the different sustainable development goals (SDGs) and targets. At the same time, synergies may also materialize and reinforce firm’s contribution. This chapter analyzes the effects of multinational enterprises (MNEs) and other foreign investors on two different targets of SDG 7, namely access of population to modern energy systems, chiefly electricity, and the use of carbon-free and renewable energy sources in sub-Saharan Africa (SSA) countries, and the authors investigate whether foreign investors experience trade-offs and synergies in their contributions. A two-equation growth model of households’ access to electricity and carbon factor is estimated by employing a panel dataset that covers 15 SSA countries and foreign direct investment (FDI) from 82 origin countries over the 2005–2011 period. The findings reveal that foreign investors are subject to a trade-off in their effects, because when they foster access to electricity they are also likely to spur carbon factor increases, and vice versa, depending on the economic development of host and home countries. Nevertheless, electrification and carbon factor reduction are shown to be linked by a system-level synergy. The results have implications for the design of MNEs attraction measures and energy policy in recipient countries.

Multinational enterprises (MNEs) are increasingly seeking to demonstrate their commitment to sustainability and inclusiveness within the societies they operate in, often by highlighting the amount of tax they pay. The author proposes to summarize channels through which tax impacts the achievement of sustainable development goals (SDGs) and analyze them in relation to a single goal, SDG 10 (reduced inequalities) in a single region (the Central and Eastern Europe, CEE). The impact of tax is often ambivalent, but above all it is hard to quantify as there are many stakeholders involved and corporations still tend to disguise their internal information. The author analyzes MNEs’ operations in the CEE region to better understand how reporting standards influence the achievement of SDG 10, focusing on country-by-country reporting (CbCR) and non-financial reporting of European banks and other corporations who publish CbCR on a voluntary basis. The authors perform a quantitative analysis of CbCR data and a qualitative investigation of 201 non-financial reports by 30 MNEs. From the theoretical viewpoint, this research may help to construct a framework to evaluate the tax impact of a given company. Given that, this chapter also outlines why and how it can be beneficial for MNEs to publish voluntary reports it can also serve to motivate increased voluntary participation of MNEs in the transition to sustainability.

The main purpose of this chapter is to understand climate change disclosures to achieve sustainable development goals (SDGs) by discussing in the context of developed and emerging countries’ company cases. Therefore, companies have been selected from the Forbes Global (2000–2021) list by looking at their climate change disclosures in their official websites and their corporate reports. Climate change disclosures have been discussed based on impression management perspective. The results of the study are that some of the tactics used in the reports are at a level that can affect the stakeholders of the enterprises. Therefore, it has been observed that climate change and the steps taken in the issue of climate change are at the top of the priority lists of companies in these four countries. This study is valuable to understand how country perspective changes in climate change disclosures to enhance SDGs by implementing impression management tactics.

This empirical chapter contributes to international business (IB) research on the United Nations’ sustainable development goals (SDGs) by opening a new research trajectory on sustainable headquarters (HQ) buildings. This multidisciplinary study conceptualizes the notion of a sustainable HQ based on a case study and three streams of literature – research on HQs, sustainable office design and the SDGs in IB. It offers a novel angle to prior research on HQs that has largely focused on their functional roles. While IB scholars are increasingly embracing the SDGs, limited attention has been devoted to SDG 11, “sustainable cities and communities.” This chapter draws on a real-time, longitudinal, single case study of a Nordic multinational in renewable products. The authors adopt a future-facing, phenomenon-based approach to envision and reimagine the modern wooden corporate HQ building on a culturally sensitive site in the heart of Helsinki, Finland. The findings emphasize the environmental, social, economic and cultural considerations of HQ buildings. By combining HQ premises with commercial spaces, and by opening the building to citizens, sustainable HQ buildings create a lively city space and increase urban social cohesion. The use of wood as a construction material and the application of design principles that promote human–nature relationships, have a positive impact on climate and human health. By focusing on the physical building, the authors aim to change the way IB scholars understand and study the role of HQ as a part of sustainable cities.

Ports and port cities play a pivotal role toward the sustainable development of coastal ecosystems. These ecosystems provide their natural capital by offering favorable locations for industry and accessibility to world markets. While port industrial activities have been reactive to pressure from stakeholders, in more recent years ports have adapted inclusive strategies and seek to align their strategic intentions with stakeholders. Around the world, port authorities are aligning their ambitions toward their contribution to the sustainable development goals (SDGs), such as the World Port Sustainability Program (WPSP) for port authorities and AIVP2030 for port cities. The aim of this chapter is to assess to what extent ports have contributed to the implementation of the SDGs. The analysis is based on a content analysis on a portfolio of 212 projects in which port authorities demonstrate leadership in sustainable development. The results indicate that the contributions of port and port city authorities are generally motivated to “do no harm.” Port authorities also have “do good” intentions for their ecosystems, which are mainly focused on reenforcing connections with communities and less to restore their impact on the biosphere. Furthermore, the findings show that linkages between WPSP projects with the SDGs are rather ambiguous. Directions are given toward a methodology for port authorities (PAs) to establish a stronger link between (monitoring) business strategies with the implementation of inclusive port development strategies to prevent using SDG reporting for greenwashing purposes.

International trade and production have been increasingly organized around the configuration and evolution of global value chains (GVCs), even as the sustainable development goals (SDGs) have been established in an era of deepening globalization. The connection between these two processes raises some concerns around how economies, firms, and individuals can benefit from participation in the global economy. This chapter looks at the relationship between the relative positions of countries in high-tech GVCs and the impact on potential fulfillment of the SDGs. In this chapter, the authors make a first approach (descriptive analysis) to the relationship between the relative positions of countries in high-tech GVCs, possibilities for upgrading, and corresponding levels of inequality. The authors focus particularly on a set of indicators corresponding to Goal 1 (no poverty), Goal 5 (gender equality), Goal 9 (industry, innovation, and infrastructure), and Goal 10 (reduced inequalities). The findings reveal that the relationship between the position of a country in terms of forward and backward participations and the relative distance to fulfillment of the SDGs differs among distinct GVCs. While some patterns of income inequality reduction are observed in high-tech-related industries, gender inequality is not similarly affected. This confirms the relevance of building a two-dimensional framework that looks simultaneously at GVCs (i.e., the type of GVC and type of participation) as well as the distance from SDG achievement.

This chapter investigates the coffee value chain in Latin America. By drawing on the concept of just transitions as a “connective tissue” between the sustainable development goals (SDGs), the discussion zooms in on the promise of agroforestry for environmental upgrading. The chapter concludes by providing examples of trade-offs between environmental, social and economic aspects.

How does context shape the way in which corporations contribute to or impede progress toward sustainable development goals (SDGs)? In this chapter, the author studies how the state as corporate owner and in its broader function in the institutional environment affects companies’ involvement in misbehaving practices related to human rights issues, with a focus on the banking industry. Based on a longitudinal analysis of 178 banks over the cohort 1996–2018, the results show that state-owned banks, as well as those from institutionally weak environments, are more involved in business-related misbehaving practices. Moreover, in a strong institutional environment, state-owned banks are more involved in corporate misbehavior than non-state-owned banks. These results contribute to the literature on corporate misbehavior, focusing on the state’s role in preventing or facilitating banks’ involvement in misbehaving practices. The author concludes by discussing the findings’ implications and providing suggestions for future research.

While multinational companies develop meta-level policies to address grand sustainability challenges and CEOs are increasingly showing their social activism, the hard work of concretely defending communities’ rights and the environment from business exploitation is often left to powerless individuals, known as human rights defenders (here defenders), who face severe risks for their advocacy. According to some statistics, between 2015 and 2022, defenders worldwide have been subject to over 4,000 attacks, including killings, tortures, and intimidation. In this chapter, the authors discuss the relevance of defenders to the promotion of the sustainable development goal (SDG) agenda and develop a conceptual model to predict CEOs’ reactions to defenders.