The sustainability of MNE sustainability initiatives

Abstract

Allen et al. (J Int Bus Stud, 2024) present a compelling argument that MNEs can play a role in mitigating climate change by utilizing their vast resources, technological advancements, and global reach. They provide a broad set of suggestions of what MNEs can do to advance sustainability across borders but leave the critical question of why MNEs would engage in this effort less explored. In reflecting on their work, I suggest that sustainable MNE initiatives require an interplay of both extrinsic and intrinsic drivers, encompassing stakeholder pressures, regulatory frameworks, and private and public incentives; and recognition by the firms themselves of how climate mitigation could support their strategy and self-interest. The more MNEs recognize the intrinsic benefits of climate-mitigation action in advancing their strategic vision and organizational legitimacy, the greater the likelihood that sustainable practices will become ingrained in their business models, enhancing employee engagement and competitive outcomes, while also contributing positively to societal well-being.