Over recent decades, sustainable development has emerged as one of the most important global priorities for governments and companies. The United Nation’s Sustainable Development Goals (SDGs) were adopted in 2015 and seek to resolve issues affecting humanity to include poverty, employment, inequality, climate change, sustainable use of resources, peace and justice.

Many MNEs exploit lax labor and environmental laws in developing nations, contributing to inequality and unsustainable practices.

Although these goals have attracted considerable attention, MNEs are being subjected to enhanced pressure regarding their contribution to promoting, or hindering, the achievement of such objectives. While there are isolated improvements by some firms, it is getting increasingly clear that many MNEs are not living up to the world’s sustainability agenda. This is not only a disaster for environment and communities, but for inequalities, for unsustainable economy, for corporate greed.

This includes an essential problem of the tension between making a profit and being environmentally friendly or practicing other corporate and social responsibilities. MNEs usually have their operations in more than one country and their motivation is mainly to maximize their profits that means they do not value long term sustainability.

This is most noticeable in the sectors like oil and gas, clothing and accessories, and information technology where raw materials are exploited, workers are underpaid and exploited, and the environment degraded. For instance, most international oil and gas companies are still exploring and committing huge resources towards drilling in their global portfolios when everyone knows that there is need for energy diversification and the use of green energy.

Air and water pollution, habitat destruction as well as overwhelming contributions to global warming by these industries are invariance with the goals set by the SDGs to end climate change and to conserve the life on land and sea.

Furthermore, the networks of MNEs are usually highly diversified and less transparent with the elongated sub-tangent supplying different nations which have different laws preserving the work force and the environment. According to the late cost consideration, most companies managed by MNEs contracted out production to nations where they had lax legal stipulations on workers’ remunerations as well as the environment.

MNEs often engage in “moral washing,” presenting CSR initiatives that fail to align with genuine sustainability goals.

This practice has led to cases of massive exploitation of the workers through the contract work, cases of child labor, cases of unsafe working environment and most important unfair wage determination. The garment industry, which has recently expanded its sectors, will illustrate this perspective best. Large fashion companies – most of which – are international are notorious for sourcing from subcontractors in developing nations where employees are exposed to unfavorable treatment.

Cambridge, United Kingdom-based research firm posted revelations that while companies are now keen on advertising themselves as socially conscious and environmentally sensitive, they do not necessarily act in the same way. This leads to the inability to meet the Sustainable Development Goals 8: Promote sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all; and Sustainable Development Goals 10: Reduce inequality within and among countries.

Furthermore, while current global MNEs are starting to adopt CSR that allows them to claim they are socially responsible organizations, most such practices are nothing more than a guise, also referred to as ‘moral washing’. Today, the majority of MNEs contribute a fraction of their profits for charity or the environment, which still may lack the objective of sustainability.

For instance, some companies have pledged their firms to limit their emissions of carbon or go ‘carbon-free’, yet they use fossil sources or encourage negative impacts environmentally in other areas of operation. This contradiction despises the relevance of the SDGs, and it is a perfect example of how MNE can go around influencing the public without having a positive impact.

Practices like outsourcing and wealth repatriation deepen inequalities, undermining SDGs 1 (End Poverty) and 2 (Zero Hunger).

The other equally serious issue is the ability of MNEs to contribute to the increase of global inequality. Although these enterprises produce good revenues, they bear injustices in their operations across international markets. Multinational firms often undermine the assets of the emerging market nations without appropriate reward to host populations or its society.

In many cases the companies wring the wealth that is produced in these locations and repatriate it to their home countries with very little trickle down to the communities or regions. This practice compounds inequalities that exist in the use of economic resources, making progress towards attainment of Sustainable Development goal 1 – Ending poverty, and Sustainable Development goal 2 – Ending hunger.

In the same way, large foreign investors’ control over global markets can choke the competitive opportunities of local companies and thereby create an environment of monopolistic control and accumulation of resources by a few giant ventures.

Another reason why the global financial system is wider opened is that it too contributes to the furthering of unsustainable practices by MNEs. Official international organizations like the World Bank and the International Monetary Fund, therefore, attune themselves to stimulate growth for the creation of investment opportunities for global capital without much emphasis on the environment or social impacts.

International financial institutions like the IMF and World Bank finance projects with significant environmental and social costs.

They remain to promote programs and businesses that cause negative impacts to the environment and social structure. For instance, big works financed by international banks, roads, dams or similar usually ends up with the eviction of native peoples or the destruction of ecosystems in the sake of development. This systemic issue, once again, gives an example of how MNEs together with international financial institutions are involved with the negation of world sustainability strategies.

Disclaimer: The opinions expressed in this article are solely those of the author. They do not represent the views, beliefs, or policies of the Stratheia.