Fostering Environmental Prosperity, Multinationals in Developing Countries
Multinational corporations (or MNCs) – those that are headquartered in a home country and operate in many countries around the world – account for a large and growing share of business across the globe. The economic data and case studies in the following report similarly show how MNCs positively influence industry’s environmental health and safety performance in developing countries. Leading MNCs clearly hold themselves to a much higher environmental, health and safety standards than those of their indigenous competitors. It also stands to reason that indigenous companies can be forced by competition with MNCs to improve their environmental health and safety performance.
In Fostering Environmental Prosperity, Multinationals in Developing Countries, two types of evidence – analytical and anecdotal – are presented in this report to support the fact that MNCs foster economic prosperity and improved environmental performance. The first evidence consists of analytical data on the important role that investment by MNCs plays in foreign direct investment in developing countries, the many respects in which MNC investment lifts local economies, and – importantly – the superior environmental performance of MNCs when compared to that of indigenous firms.
The evidence includes a unique, comprehensive data set from factory-level World Bank data that shows MNCs in developing countries outperform all other firms on environmental grounds. In addition to this statistical analysis of MNCs’ environmental, health and safety performance, this report also presents a series of anecdotal studies of operations of GEMI-member companies in developing countries. The case studies, reporting on both those companies that are new to international markets (at the time of this publication) and those with long international experience, point to the dramatic positive effects that MNCs have in developing countries.
Coupled with the rapidly accumulating statistical evidence demonstrating the superior environmental, health and safety performance and positive economic contributions of MNCs in developing countries, the examples outlined in this report lead to an inescapable conclusion: Once one recognizes that economic development inevitably will take place in these countries, it becomes clear that it is to developing nations’ distinct economic and environmental advantage to foster environmental prosperity by orienting their policies to attract MNCs.
