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Can transnational corporations leverage systemic change towards a ‘sustainable’ future?

Nature Ecology & Evolution volume 4, pages 491–492 (2020)Cite this article

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To the Editor — We welcome the idea that transnational corporations (TNCs) can play a central role in the protection of the biosphere, recently contributed by Folke et al.1. It is certainly crucial to understand how TNCs affect the biosphere. While the authors provide a comprehensive overview of the impact of TNCs on the biosphere and propose some pathways through which TNCs might contribute to the stabilization of the Earth system, we argue for increased attention to several crucial intrinsic features of TNCs that are problematic for the central question posed by the paper: “Can TNCs leverage large-scale systemic change, accelerate positive transformations towards sustainability, and contribute to a safe operating environmental space for humanity?”1.

First, currently the incentive structures for TNCs, which are largely determined by global financial markets2, demand continuous profits in order to deliver high returns on investment3. Folke et al. concede that TNCs in many documented cases meet profit expectations by instigating “excessive, wasteful consumption founded on a fossil-fuel driven economy”. However, abstaining from such practices would for many TNCs (for instance in the fossil fuel, mining and garment industries) imply not only a minor adjustment of their business model, but a discontinuation of their core purpose and structure. While the idea of “corporate biosphere stewardship” as a “new business logic with the purpose of shepherding and safeguarding the resilience of the biosphere for human well-being” is appealing, it seems to implicitly build on the assumption of a “business case for corporate sustainability” where businesses can make money through contributing to environmental integrity and social equity. This assumption is unlikely to apply to every business context, and has not been empirically supported4. Biosphere stewardship and social equity are in many cases opposed to the profit expectations of the global financial system, and thus the incentives for TNCs to engage in biosphere stewardship are limited. There is a contradiction between the vision of a sustainable and just world5,6 and the disproportional concentration of market share, wealth and power in a few TNCs and their shareholders. Therefore, ownership and investment structures of TNCs pose a key challenge, if not a barrier, to their potential to act as biosphere stewards.

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Authors and Affiliations

  1. Stockholm Business School, Stockholm University, Stockholm, Sweden

    Anselm Schneider

  2. Stockholm Resilience Centre, Stockholm University, Stockholm, Sweden

    Jennifer Hinton, David Collste, Taís Sonetti González, Sofia Valeria Cortes-Calderon & Ana Paula Dutra Aguiar

  3. Centre d’Études et de Recherches sur le Développement International, CERDI, Université Clermont Auvergne, Clermont-Ferrand, France

    Jennifer Hinton & David Collste

  4. Brazilian Institute for Space Research (INPE), São José dos Campos, Brazil

    Ana Paula Dutra Aguiar

Authors
  1. Anselm Schneider
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  2. Jennifer Hinton
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Correspondence to Anselm Schneider.

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Schneider, A., Hinton, J., Collste, D. et al. Can transnational corporations leverage systemic change towards a ‘sustainable’ future?. Nat Ecol Evol 4, 491–492 (2020). https://doi.org/10.1038/s41559-020-1143-4

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