Global Policy Forum

Multinational Corporations are Incompatible with Sustainable Development


By Stephen Viederman
President, Jessie Smith Noyes Foundation

Remarks at United Nations Correspondents Association Press Briefing
June 23, 1997

I call upon the United Nations to take sustainable development seriously and to recognize, in the process, that multinational corporations and sustainable development are incompatible. This is not anti-corporate. Rather it is simply descriptive, reflecting systemic barriers to change that are endemic to what we define as "economic".

1. Witness the Denver Summit just completed and the United States' foot dragging on actions needed to contain and reverse global climate change. Relate that to the Business Roundtable's three page ad in the Wall Street Journal on June 9 signed by the heads of America's largest corporations urging just what the President concluded in Denver. And was it just a coincidence that Mobil's usual spot on the op-ed page of the New York Times, also urging America to slow down on the climate change discussions, was on A8, right next to the article on the Summit this morning?

2. Witness also Mobil's call in the aforementioned ad for improved technology transfer - their public stance. But ask them about their position in Washington on legislation that blocks the transfer of important technologies.

3. Witness the finding of the UNDP Human Development Report that to eradicate poverty we will need to empower individuals, households and communities to gain greater control over their life and resources. When nations, large and small, industrialized and industrializing, cannot control their destinies as multinational corporations seek the cheapest labor, and the largest markets to sell what they have to offer, but not what people need, what can communities, households and individuals do? Does the Multinational Agreement on Investment, being secretly negotiated by the industrialized nations in OECD, help local control? Or is it more aptly called the Multinational [corporation] Assistance Initiative?

The problem is that the business of business is business, not sustainable development. This despite the language of Monsanto and Dow and others that confuse sustainable development with being more environmentally sensitive.

Yes, businesses are and can become ever more environmentally sensitive. It is in their interest to do so because waste is a cost. Reduction of waste contributes to profit. As a recent study has shown, improved environmental performance can increase shareholder value by up to 5 percent.

But sustainable development is more than about the environment, as UNCED underlined. We cannot save the environment without a commitment to community and place; without a commitment to future generations; without a commitment to democracy and participation; without a commitment to equity; without a commitment to the alleviation of poverty; among other things. But these commitments are sadly not defined as economic drivers, and therefore, not on the multinational corporation's agenda.

If this special session and the longer term work of the UN Commission on Sustainable Development does not seriously address explicitly and directly the role of the multinational corporation in sustainable development, as barrier and as potential ally, they will be playing a hoax on the people of the world. The rich will get richer, the environment will ultimately suffer greatly, the poor will get poorer, and the discussion of sustainability will only sustain large numbers of elites and bureaucrats, while the people of the world's vision and reality of sustainability will remain far distant.

We must change the terms and substance of the debate. This will require the exercise of political will well beyond anything we have seen to date. If not we can only hope that Sisyphus enjoys his task of pushing that rock of sustainability up the hill, because he is going to be doing it for some time to come.

[What follows is the text of a statement distributed to the press at the briefing.]

Multi-national Corporations and Sustainable Development

Multi-national corporations and sustainable development are presently incompatible. Unless the United Nations Commission on Sustainable Development and the other international, national and local groups working on sustainable development recognize this fact, the only thing that will be sustained is the discussion, not the development. Sustainable development is more than development that is environmentally sensitive. It must be, as the UNCED process reaffirmed, a systemic concern for poverty and the environment.

Multi-national corporations are, by and large, more environmentally sensitive today than they were a decade ago. But there is much more they can and must do to protect and restore the environment which is the basis for all life and for all production. And to do so is not only socially responsible, it is also good for the bottom line. As a recent study demonstrated, improved environmental performance can increase shareholder value by as much as 5 percent.

That corporations are the major force - political, social, environmental, cultural and economic - in the world today is undeniable. Given the limits imposed upon them by the way we define the economy and by human avarice, they are also the major obstacle to achieving some common vision of and action toward a sustainable society.


Corporations have no commitment to community or place. Though increasingly committed to repairing ecological damage they might inspire, assuming that is possible, corporations have no comparable commitment nor incentive to repair communities devastated by plant closings and downsizing, or by the introduction of new technologies that destroy the base of an economy.

Corporations have no commitment to future generations. The next quarter is the attention span of most managers and shareholders, rather than the next quarter century.

Corporations have no commitment to democracy. They often confuse demography with democracy, creating "demographically correct" community panels answerable only to the company, while claiming a commitment to real dialogue. They discourage participation by stakeholders, both workers and communities, who are often labeled "vocal minorities."

Corporations have no commitment to equity. They create and reinforce income disparities that are an anathema to sustainability. Witness the gap between executive salaries and worker salaries: in 1993 CEO pay was 149 times average worker pay, up from 41 times in 1980. And, on average, 230 times more toxic waste was emitted in neighborhoods near the plants of the fifty largest polluters than in the communities of the CEOs responsible for the waste.

Corporations have no commitment to alleviating poverty. The economists tell us that poverty will disappear as a result of economic growth, but a quintupling of the world's economy post-World War II has been accompanied by greater rather than less poverty.

Corporations seek to create greater wants, focusing on "excessities" more than necessities. Greater consumption among the already affluent is not a contribution to environmental or social sustainability.

The Economist reflected recently on the conflict between the market and community: "[A] vibrant market economy [demands] a mobile workforce; ambitious entrepreneurs willing to work all hours for more money; competition; redundancies and work incentives. The requirement for stable communities [they continued are] people who stay in one place, able volunteers with time and energy to devote outside to the common weal, co-operation, job security and generous welfare safety nets."

We cannot have it both ways; we must choose a path. Will they continue to be an obstacle, or can they become an ally?

One path - unsustainable development - is exemplified by the Multilateral Agreement on Investment (The MAI), presently be negotiated away from public view by the OECD. The MAI might more aptly be titled the "Multinational [corporation] Assistance Initiative."

Another, more sustainable path, might be to create a process for rechartering corporations for limited periods of time and for specific democratically determined and socially responsible purposes, as historically they once were.

Do we have the political will to effectively create change, or will we simply continue to talk in the hope that the problem will go away? Do we fear the current reality so much that we will continue to deny the facts and continue on an unsustainable path? That is the question that must be at the top of the United Nations Commission on Sustainable Development's agenda as this session of the General Assembly begins.

Jessie Smith Noyes Foundation 6 East 39th Street, New York, NY 10016. 212 684 6577; 689 6549 fax; This e-mail address is being protected from spambots. You need JavaScript enabled to view it



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