How can we make multinational corporations (MNCs) more conscious of their environmental responsibilities?

Multinational corporations (MNCs) have evolved not only in number, but also in value and price in an increasingly globalised world. They expand their operations worldwide via foreign direct investment (FDI) and thus function in a wide range of countries; especially those with the most favourable conditions, such as cheaper rates (i.e. wages and social security) and relatively negligent labor sector, environmental regulations and laws. 

Bangladesh, since its founding in 1971, has piqued the interest of several multinational corporations (MNCs). MNCs are thriving here and helping to improve Bangladesh's productivity and economy. 

MNC's access to Bangladesh's capital markets enabled them to finance substantial investment in research and development for resources and for the maintenance and reinforcement of their role in the energy and technology industries, which have in turn boosted the advancement of other sectors in the country.  

MNCs shape their host country's industry policies, in which they develop proprietary production facilities. It has been repeatedly claimed that MNCs operate in developing host countries, such as Bangladesh, in a much frail environment standard than in their countries of origin. 

However, most developing countries tend to meet corporate demands because MNCs are essential to their economic growth. Presently, none of us can refute the importance of MNCs in the globalisation process. 

They dominate the economy's several strategic sectors: agriculture, food, water, healthcare, energy, infrastructure, telecommunications, weapons, and media. There has been a lot of discussion in the different communities across the economic and social spectrum about how MNCs function and affect the environment.

While MNC's financial, administrative, and technical abilities can make a valuable contribution to environmental conservation, their actions have led to significant harm to natural resources in multiple cases. 

These adverse effects conflict with critical global processes and create environmental challenges (i.e. drought, excessive flooding, ozone layer depletion, biodiversity loss, etc.) at both local and global level. 

Because of aggravating instances of significant environmental degradation stemming from several activities of corporations, the detrimental effects of MNCs on the environment have attracted a lot of attention. 

Sustainable corporate planning is inextricably connected to public health and environmental conservation. Extended disregard for societal needs can evoke public outrage, which could jeopardise the company's ability to operate successfully. 

Blatantly neglecting environmental issues and ignoring environmental protection can result in the destruction and depletion of natural resources that can be harmful to both businesses and society. Conversely, if a business invests in society and improvement of the environment, it will prosper and earn incentives. 

Approaches such as waste management, environmental education, and awareness must be taken into account by the MNCs in order to minimise adverse impacts. Over the years, it has become apparent that consumers are increasingly favouring goods that are environment-friendly, safe, and non-polluting. 

The shift in customer behaviour towards the conservation of the environment is forcing business corporations to search for new options in which the core values of corporate social responsibility (CSR) are incorporated. 

Implementing CSR would not only direct MNCs in complying with environmental laws, but can allow businesses to build economic advantages, have beneficial effects on their image, and customer satisfaction among other things.

Regulatory and public pressure, compels corporations to reform their operations and abide by the laws. MNCs can adopt the following steps to mitigate environmental damage- maintain eco-efficiency, eco-friendly offices, eco-labels, environmentally sustainable design, and industrial ecology. 

Our government and relevant authorities must ensure that MNCs conform to the foregoing initiatives and play their part competently and professionally, If this is achieved, MNCs will not only comply with regulations in order to avoid penalties, but they will also go above and beyond because it will be in their business interests to address environmental issues.

The author is an undergraduate student in the Department of Environmental Science at a private university in Dhaka, Bangladesh. He can be reached at [email protected] 

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinions and views of The Business Standard.