The sustainability solution in MNEs: understanding the impediments to its implementation

Luis F. Escobar

Chapter 4 in The Role of Multinational Enterprises in Supporting the United Nations' SDGs, 2022, pp 79-99 from Edward Elgar Publishing

Abstract: While scholars favour a sustainability solution strategy through which Multinational Enterprises (MNEs) resolve sustainable development pressures, the evidence suggests that few MNEs use it. Based on cognitive frames and social capital research, I build a typology of sustainable development strategies, among which the sustainability solution is only one. I argue that the adoption of the sustainability solution depends on two conditions. First, the shared cognitive frame embedded through the MNE, which shapes managers' decisions, should point towards an expanded network of stakeholders and the understanding that sustainable development issues are intertwined. The second necessary condition builds on the notion that the MNE's subsidiaries develop different levels of bonding and bridging social capital with their host country's stakeholders. I argue that implementing the sustainability solution is only possible when these forms of social capital are abundant. Therefore, the sustainability solution may be a rare occurrence among subsidiaries; hence the MNE is unlikely to adopt this strategy as the dominant approach to address sustainable development pressures.

Keywords: Business and Management; Economics and Finance; Environment (search for similar items in EconPapers)
Date: 2022
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