Multinationals: three strategies for responsible management of natural resources
10/10/2023
A recent review by McKinsey highlights that while Fortune Global 500 companies increasingly recognize the importance of nature, few companies have established nature-related commitments outside of carbon. A recent paper by professors from IÉSEG and Ivey Business School in Canada, published in the Journal of International Business Studies, calls on multinational companies and researchers working on topics related to international business to consider more explicitly the role of natural resources in their activities. They suggested that multinational enterprises (MNEs) have contributed disproportionately to the environmental crises and proposed a sustainable approach incorporating three potential strategies for MNEs.
“Since the end of World War II, international business has played a crucial role in promoting economic growth and improving the quality of life for many people around the world. However, this wealth creation and distribution has come at a significant environmental cost,” outlines Haitao YU, a professor at IÉSEG and co-authors of the article.
“International businesses, with their global reach and scale, have been shown to have a greater impact on the environment than their domestic counterparts. By extracting resources in one location, manufacturing products in another, and selling them in yet another, international businesses create and dispose of waste along their supply chain. Unfortunately, at present there is little economic incentive for these companies to address their environmental impact beyond the bare minimum required by local regulations.”