Multinational enterprises are failing the world’s sustainability goals, says study

Multinational enterprises (MNEs) are not just falling short of global sustainability targets but are actively contributing to the very problems they claim to address, according to a new study from the University of Surrey. This study argues that there is an urgent need for MNEs to reassess their innovation strategies to align with the United Nations Sustainable Development Goals (SDGs).

The research team found that many MNEs are prioritizing profit over sustainable practices. The study highlights how MNEs often adopt superficial compliance measures rather than engaging in meaningful, sustainable innovations by analyzing case studies from various countries, including both advanced and emerging economies.

The study found that while MNEs invest in environmentally friendly initiatives, such as renewable energy projects, these efforts often serve as mere marketing tools rather than genuine commitments to sustainability. The researchers conducted extensive interviews with industry leaders, analyzed corporate sustainability reports, and examined innovation practices within diverse ecosystems. The results show that many companies are not leveraging local stakeholder knowledge or addressing specific regional sustainability challenges, undermining their potential impact.

Dr. Shasha Zhao, Senior Lecturer in International Business and Innovation and lead author of the study at the University of Surrey, said, “Our findings challenge the notion that multinational enterprises (MNEs) are inherently beneficial for sustainable development. Many are simply ticking boxes rather than innovating in ways that truly address the pressing challenges faced by local communities.”

Many companies in the study expressed frustration over the lack of genuine engagement from MNEs. One local entrepreneur remarked, “It feels like they come here to take rather than to give. We need meaningful partnerships that consider our unique challenges.”

The disconnect between MNEs’ stated commitments and their actual practices raises questions about corporate accountability and the effectiveness of current sustainability frameworks. The research suggests that a more collaborative approach involving local communities and stakeholders is crucial for MNEs to create innovations that genuinely contribute to solving social and environmental issues.

Dr. Zhao continued, “This is a wake-up call. To be part of the solution, they must engage deeply with local contexts and move beyond superficial commitments to sustainable innovation. Multinational Enterprises are uniquely positioned to drive positive change. By integrating sustainable practices and fostering innovative ecosystems, companies can address pressing issues such as climate change, political instability, and social inequality.”

The work is published in the journal International Business Review.