Introduction

The enactment of the Sustainable Development Goals (SDGs) by the United Nations in 2015 gave much hope of addressing the world’s grand challenges, as it established an agenda for global action for people, the planet and prosperity (UN, 2015, p. 1), around 17 goals ranging from poverty and inequality to climate change and environmental degradation (Cuervo-Cazurra et al., 2018; Doh, 2019; Montiel et al., 2021). With tremendous efforts by key stakeholders globally to achieve these goals by 2030, progress is encouraging but insufficient. Numerous factors (such as the COVID-19 pandemic, the rise in geopolitical tensions, or natural disasters) affect countries’ ability to prioritize the SDGs and/or lead to a rise in the resources needed to achieve these goals (Han et al., 2024). UNCTAD’s estimates show the annual investment gap to achieve the SDGs jumped from $2.5 trillion in 2014 to $4 trillion in 2023 (Giroud, 2024).

Multinational Enterprises (MNEs) can and do play a key role in supporting the SDGs. To help in our understanding of this role, a rising body of business and management research explores MNEs’ activities, strategies, and SDG-related impacts, framing research questions around broad SDGs (see for instance special issues published by van Tulder et al., 2021; or Sinkovics et al., 2022), specific challenges (e.g., poverty alleviation, Chen et al., 2024), and/or firms’ sustainability strategies. Early studies in the 1980s and 1990s addressed the issue by emphasizing macro-level developments and concentrating on economic considerations; more recent work encouraged a firm-level approach (Kolk et al., 2017), with a greater focus on the social and environmental impact of firms in both host and home countries, emphasizing the difficulties inherent to link MNEs with SDGs due to rising geopolitical tensions and a resurgence in protectionism (UNCTAD, 2024).

Existing literature has shown that MNEs can contribute to the SDGs through various trade and investment strategies and operations in home and host countries, either through their own activities or by cooperating with various private, public, or civil stakeholders (Ghauri et al., 2017; Rygh et al., 2021; van Tulder et al., 2021). International trade and FDI are discussed under the categories of trade and inequality and MNE operations in emerging and developing countries. The social and environmental impacts of MNEs have attracted increasing attention, with an emphasis on how these firms can contribute positively or negatively to numerous societal challenges, such as environmental pollution (Zhao et al., 2023), local income distribution, health and education, gender equality (Eden & Wagstaff, 2021), poverty reduction (Kolk, 2016), human rights (Wettstein et al., 2019), or renewable energy (Patala et al., 2021), within or across countries in which they operate.

Indeed, as part of their sustainability efforts, MNEs are increasingly incorporating the SDGs into their corporate strategies, rethinking their objectives and shifting from profit to social and environmental value creation (Camilleri, 2017) or shared value (Porter & Kramer, 2011), for instance by developing novel social innovation practices or sustainable technologies (Zhao et al., 2024). But firms may face tensions that prevent them from moving toward more sustainable strategies (Giroud, 2024), the global economy is stagnating and FDI flows are declining (UNCTAD, 2024). In this context, even though MNEs have a strategic role to play in the SDGs (Mio et al., 2020), there may be challenges in how they do so, and whether countries can achieve the SDGs. Numerous scholars remain critical as to whether corporate and governmental actions are sufficient. For instance, van Zanten and van Tulder (2018) suggest that MNEs generally limit actions to reducing negative impacts rather than integrating sustainability within their core strategies. Additionally, many question whether firms’ Corporate Social Responsibility (CSR) strategies are sufficient (Kolk, 2016). To enhance the debate, scholars such as Montiel et al. (2021) call for more research on how MNEs can look at their sustainability practices and integrate positive and negative externalities to translate country-level SDGs into firm-level actions. Others call for more research on collaboration and partnership, one of the core SDGs, arguing that cross-sector and multi-stakeholder collaborative efforts may result in greater sustainable impact (Kolk et al., 2017).

This special issue contributes to this body of literature with a specific focus on Asia, thus responding to the recent call to uncover the distinctive nature of the region to enhance business and management theory development for sustainable development (Liu, 2024a), and because of Asia’s distinct environments (Pananond & Giroud, 2016). Over the past few decades, Asia has firmly established itself as an economic powerhouse on the global stage. In 2023, Asia (developing and developed Asia) accounted for nearly two thirds of global inward FDI and for over two fifths of outward FDI (UNCTAD, 2024). This means MNEs’ activities in and from the region are crucial to SDG progress. MNEs have long been shown to be significant actors behind Asian countries’ remarkable growth over the past few decades.

There is a large body of knowledge that explains how MNEs contribute to Asian countries' economic development (both as host and home to MNEs). For instance, research demonstrated how MNEs contribute to local host environments through linkages and spillovers (Giroud, 2007) or to the innovative potential of MNEs (Zhao, 2021). Today, MNEs remain key drivers of change in the region and beyond because they drive or hinder sustainable development through trade, investment, and value chain activities. The SDGs act as an incentive to better understand and conceptualize how MNEs also contribute to inclusive development and human well-being (Kourula et al., 2017) and to the natural environment within and across Asia. Yet, we still lack a concise understanding of the role played by MNEs in Asian countries’ potential to achieve the SDGs.

To respond to this gap, this special issue addresses the following question: To what extent do MNEs in and from Asia contribute to SDGs? In our introductory article, we first uncover why Asia is a fertile ground to study the role of MNEs in helping countries achieve the SDGs, providing a critical assessment of remaining challenges that may slow down impact, before uncovering strategies and mechanisms through which impact on the SDGs occur. We conclude with avenues for future research.

MNEs and SDG Achievements in Asia

Asia’s Journey to Achieve the SDGs

Asia, as a populous and economically diverse region, holds a pivotal role in realizing these SDGs. With its rapidly growing economies, significant environmental challenges, and diverse socio-political contexts, Asia faces both unique opportunities and critical responsibilities in addressing the SDGs. Asian nations, ranging from developed economies like Japan and South Korea to emerging markets like China, India and Vietnam, showcase varying degrees of readiness and capability to implement sustainable practices, making the region a microcosm of global opportunities and challenges. Across the region, multinational enterprises (MNEs) are key actors capable of driving transformative change, contributing significantly to regional economic, social, and environmental growth because they possess the resources, technology, and global reach necessary to help countries achieve the SDG goals (Zhan & Santos-Paulino, 2021).

Asia's journey toward achieving the SDGs is not uniform because the region is institutionally diverse. It is shaped by its vast demographic diversity, rapid urbanization, persistent poverty, and cultural complexity (UNDP, 2023a; 2023b). These unique conditions present both challenges and opportunities for sustainable development, making MNEs pivotal players in driving progress. While MNEs and globalization have enabled Asian countries like China, India, and Japan to lead in economic output and global trade, they also create responsibilities for tackling SDGs such as climate change (SDG 13). The regional heterogeneity in culture and governance, both a strength and a challenge, necessitates unified approaches for greater SDG impact. The region faces critical challenges, including climate vulnerability in countries like Bangladesh (e.g., see Mair et al., 2012) and the Philippines and extreme urbanization in megacities such as Mumbai and Jakarta (Lewis et al., 2021).

To address these challenges, tailored SDG strategies must consider Asia’s unique socio-economic and environmental realities. Simultaneously, Asia's economic dynamism offers opportunities to pioneer innovative solutions, such as green technologies and sustainable urban planning, that can serve as models for other regions. Unique features in Asian Business and Management mean Asian firms have a history of adopting sustainable practices inspired by regional traditions, such as Confucianism in China and Japan and religious values in South Asia. Leaders like Shibusawa Eiichi exemplified the integration of societal welfare into business operations. Although these approaches have not become widespread, the rise of SDGs has revived interest in them (Jones, 2025). Asia's economic role extends beyond regional boundaries (e.g., through internationalization of its own MNEs). As the world's largest manufacturing hub and a critical player in global supply chains, Asia holds the potential to shape global sustainability norms, and a better understanding of the role of MNEs in shaping SDGs in the region can have far-reaching implications. With their extensive global operations and substantial resources, MNEs are strategically positioned to advance sustainable development while simultaneously promoting responsible business practices (Kolk et al., 2017; Montiel et al., 2021; van Zanten & van Tulder, 2018). Across Asia, MNEs have contributed significantly to regional economic development through knowledge transfer, innovation spillovers, and integration into global value chains (GVCs), fostering economic growth and enhancing local capabilities (Giroud, 2007; Scott-Kennel et al., 2022; Zhao, 2021). Studies show MNE activities across Asia have helped drive economic development (Asakawa et al., 2019; Girma et al., 2019; Kolk et al., 2018; van der Straaten et al., 2020), boosted innovation (Inkpen et al., 2019; Jin et al., 2019; Lorenzen et al., 2020; Zhao et al., 2022), advanced environmental sustainability (Li & Zhou, 2017; Maksimov et al., 2019; Surroca et al., 2013), and contributed social change.

Significant challenges remain, and despite MNEs’ significant contributions to sustainable development across Asia, a comprehensive understanding of their role in supporting SDG achievement remains patchy. From contextual diversity to variation in corporate actions, regulatory hurdles, and social responsibility gaps, the way in which MNEs contribute to SDGs across Asia reflects the complex landscape, and the topic necessitates more comprehensive scholarly investigation.

Mechanisms for MNEs’ Engagement with SDGs in Asia

MNEs contribute to economic growth and development in host countries via multiple channels, including job generation (Girma et al., 2019; van der Straaten et al., 2020), linkages (Giroud & Scott-Kennel, 2009; Scott-Kennel et al., 2022), productivity spillovers (Ha & Giroud, 2015), labor income improvements (Berkey, 2021), poverty alleviation (Asakawa et al., 2019; Kolk et al., 2018), and the promotion of gender equality (Eden & Wagstaff, 2021; Koveshnikov et al., 2019). As MNEs are increasingly expected to embody a wider range of societal responsibilities (Bromley & Powell, 2012), they play a vital role in reducing the overuse of natural resources (Narula, 2018), managing waste and reducing industrial pollution (Li & Zhou, 2017; Maksimov et al., 2019; Surroca et al., 2013), and the enhancement of capacity on climate change mitigation (Huang et al., 2018).

While MNEs contribute positively to sustainability in certain areas, their actions often have unintended environmental consequences that require careful management and control. Empirical evidence demonstrates a positive correlation between FDI and the institutionalization of CSR practices, with foreign investors functioning as catalysts for responsible business conduct (Suzuki et al., 2010). Moreover, sustainability initiatives have become increasingly central to MNE strategies, with many organizations integrating green technologies and sustainability frameworks into their core business operations.

Research demonstrates that MNEs engage with sustainable development in host countries through multiple mechanisms. A primary pathway is through the transfer of advanced standards and practices (Kim et al., 2022; Wiessner et al., 2024). Here, there is a rising body of literature on global value chains (GVCs) and their role across Asia (Giroud & Mirza, 2015), showing potential economic and social upgrading when smaller firms collaborate with larger firms as value chain partners (Sinkovics et al., 2022). GVC impact varies because firms must balance economic efficiency with reducing negative externalities (Montiel et al., 2021). Ethical corporate strategies, such as voluntary codes of conduct and sustainability-driven business practices, are essential in this context.

MNEs employ CSR and self-regulation to maintain legitimacy and reputational in host markers (Jacqueminet & Durand, 2020). While CSR initiatives have the potential to drive sustainable development, their effectiveness often varies depending on the depth of implementation and stakeholder engagement. These initiatives have faced criticism for serving corporate interests rather than genuinely advancing societal goals (Doh et al., 2021; Montiel et al., 2021; Patala et al., 2021; Verbeke, 2021; Wiessner et al., 2024). During this process, MNEs facilitate the transfer of capital, knowledge, and expertise to local markets (Inkpen et al., 2019), promoting industrialization and technological upgrading (Jin et al., 2019; Lorenzen et al., 2020), which are essential for achieving decent work and economic growth. To illustrate how MNEs can address regional challenges through strategic initiatives, China's Belt and Road Initiative offers a compelling example. This initiative has been identified as a potential accelerator for SDG achievement, addressing infrastructure investment gaps in Southeast Asia and Africa, while simultaneously integrating renewable energy and green technologies into large-scale projects (Lewis et al., 2021). However, concerns about debt sustainability and the environmental impact of certain projects highlight the need for stricter control and accountability mechanisms.

International Business scholarship has tackled the impact on host-country societies followed by MNEs’ investment. MNEs contribute to economic growth and development in host countries via multiple channels, including job generation (Girma et al., 2019; van der Straaten et al., 2020), productivity or technology spillovers (Ha & Giroud, 2015), labor income improvements (Berkey, 2021), poverty alleviation (Asakawa et al., 2019; Kolk et al., 2018), and the promotion of gender equality (Eden et al., 2021; Koveshnikov et al., 2019). These economic benefits are followed by positive societal impact, as MNEs are increasingly expected to embody a wider range of societal responsibilities (Bromley & Powell, 2012). In line with the flow of FDI, MNEs play a vital role in reducing the overuse of natural resources (Narula, 2018), managing waste and reducing industrial pollution (Li & Zhou, 2017; Maksimov et al., 2019; Surroca et al., 2013), and the enhancement of capacity on climate change mitigation (Huang et al., 2018).

While MNEs contribute positively to sustainability in certain areas, their actions often have unintended environmental consequences that require careful management and control. Specifically, empirical evidence demonstrates a positive correlation between FDI and the institutionalization of CSR practices, where foreign investors function as catalysts for responsible business conduct (Suzuki et al., 2010). Moreover, sustainability initiatives have become increasingly central to MNE strategies, with many organizations integrating green technologies and sustainability frameworks into their core business operations. Furthermore, the relationship between sustainability and FDI flow is bidirectional. Rather than representing merely a cost burden, sustainability initiatives can serve as a strategic competitive advantage in the global competition for investment capital. While inward FDI promotes the adoption of sustainable practices among local firms, robust environmental and social governance frameworks also enhance a location's capacity to attract foreign investment (Pisani et al., 2019). In this context, Stephenson et al. (2021) advocate for policies and frameworks that support sustainable FDI through enhanced collaboration and targeted investment facilitation mechanisms to drive economic recovery and sustainable development.

Challenges Faced by MNEs in Advancing SDGs in Asia

Despite their significant potential, MNEs face numerous challenges in advancing the SDGs. These include fragmented regulatory frameworks, political risks in host countries, and the inherent tension between short-term profitability and long-term sustainability (Srinivasan & Eden, 2021).

At a country level, selective participation in governance-related SDGs by MNEs in politically sensitive regions like Myanmar highlights the strategic avoidance of potential risks (Rao-Nicholson et al., 2024). Addressing these challenges requires systemic shifts in corporate governance and closer alignment with local development priorities. Similarly, MNEs operating in Sri Lanka encounter various external pressures from government actors, particularly in industries with strong state control.

These initiatives are strategically designed to align with government priorities and national development goals, enabling MNEs to build strong relationships with the government while minimizing political risk (Beddewela & Fairbrass, 2016). Within this context, MNEs demonstrate a stronger inclination to engage in SDG activities that focus on "avoid harm," while showing less engagement in proactive measures that drive transformative change (van Zanten & van Tulder, 2018). This selective participation inherently results in suboptimal outcomes for sustainable development. MNEs face a complex balancing act between achieving immediate financial performance and meeting long-term sustainability goals, requiring innovative strategies to align these priorities. Moreover, the inherent tension between short-term profitability and long-term sustainability often limits the extent to which MNEs can fully integrate SDG priorities into their business models (Srinivasan & Eden, 2021). This disconnect underscores the need for systemic changes in corporate governance to balance competing interests effectively.

Increasingly, research investigates the relationship between MNEs, environmental regulations, and CSR practices in Asia. For instance, Fang et al. (2021) showed how stricter environmental regulations in China influenced FDI, encouraging adaptation of MNEs’ sustainability strategies. This shift marked a transformation in Asia's image, evolving from a "pollution haven" into a leader in corporate sustainability. Early concerns about environmental degradation caused by foreign direct investment (FDI) in Southeast Asia (Gunderson & Yun, 2017) have given way to studies showcasing the region’s progress in balancing economic growth with environmental protection. Here, the role of MNEs has been both criticized and praised.

At the firm level, challenges arise from the inherent complexity of balancing economic imperatives with societal and environmental responsibilities (Srinivasan & Eden, 2021). Many suggest that MNEs often prioritize areas that align with corporate interests, potentially neglecting issues such as governance and equitable resource distribution (van Zanten & van Tulder, 2018). This raises concerns about whether their involvement truly addresses systemic challenges or merely serves to enhance corporate legitimacy. For instance, the symbolic nature of some CSR initiatives, the tension between short-term profitability and long-term sustainability, and the duality of environmental impacts illustrate the difficulty in assessing whether MNEs produce meaningful outcomes toward the SDGs (Crilly et al., 2012).

Many MNEs prioritize short-term profitability, which often limits their ability to integrate SDG priorities into their core business strategies fully. This challenge underscores the need for systemic changes in corporate governance. By establishing mechanisms that balance economic demands with long-term sustainability goals, MNEs can better align their operations with the SDGs. MNEs have also been criticized for perpetuating environmental degradation through offshoring practices that exploit weaker regulatory frameworks in developing countries (Li & Zhou, 2017). This duality—pursuing sustainability in developed markets while externalizing environmental costs to less regulated regions—highlights a significant ethical dilemma and calls into question the sincerity of their global sustainability commitments. This raises ethical questions about the true commitment of MNEs to environmental objectives versus profit maximization.

Scholars also challenge the assumption that FDI inherently leads to positive social outcomes, advocating for a more comprehensive assessment framework that considers diverse stakeholders’ interests and questions the "win–win" assumption of complementarity between social and financial performance (Wiessner et al., 2024). The slow integration of the SDG agenda into corporate practices further compounds this challenge, emphasizing the necessity for more robust implementation strategies and a fundamental paradigm shift away from traditional profit-oriented business models (Montiel et al., 2021; van Tulder et al., 2021). Although MNEs hold significant potential to drive progress toward achieving the SDGs; the understanding of MNEs’ impact remains limited and requires deeper examination, especially regarding their social and environmental impacts (Kolk et al., 2017).

While MNEs are undeniably central to advancing the SDGs, their current strategies often reflect a selective engagement that prioritizes corporate benefits over transformative societal impact. To fully realize the potential of MNEs in achieving sustainable development, stricter regulatory administration, enhanced transparency, and collaborative frameworks between governments and MNEs are essential. In the context of Asia, determinant factors will be the trade-offs between economic versus social and environmental development, the need for catch-up for many firms, and the ability of Asian countries to leverage the region’s unique position as a major contributor to global economic growth. By fostering cross-sectoral collaborations and tailoring SDG strategies to the diverse needs of Asian nations, stakeholders can ensure that MNE contributions go beyond symbolic gestures to deliver measurable outcomes and tangible societal and environmental benefits, setting benchmarks for sustainable development globally.

Insights from this Special Issue

Despite the challenges, we see evidence in the articles of this Special Issue that MNEs play an important role in achieving SDGs in Asia and are often effective in doing so. Our intention in the original call for papers has been well-met by these articles. While they have in common the research objectives to unfold MNEs and SDGs with a strong emphasis on the unique Asian context, they are distinct in several ways. First, two of the five articles are perspective pieces with one offering a critical historical view of the phenomenon and the other offering a novel and useful conceptual approach that is not only Asia-specific but a wider context. The other three articles are empirical studies with one examining ethical standards in GVC suppliers in Bangladesh, another investigating the nexus of inward FDI and indigenous Chinese firms on local poverty reduction, and the last one exploring the role of ESG on Chinese MNEs’ overseas performance.

We introduce each of these five articles next. Jones (2025) in his article titled “Deep Responsibility, SDGs, and Asia: A Historical Perspective” put forth the perspective that Asia was a key region that led in advancing corporate responsibility, with figures like J.N. Tata in India, influenced by regional spiritual traditions, and Shibusawa Eiichi in Japan, who adapted Confucian principles for business ethics. These leaders exemplified deep responsibility, but their approaches remained individual and failed to mainstream, especially among multinationals driven by shareholder value maximization. Today, reviving these historical traditions, supported by modern networks like B-Corporations, offers a promising path toward sustainable, value-driven global business practices.

Extending this view, Buckley and Enderwick in (2025) their article titled “Tackling Grand Challenges: Reimagining A Moral Ecology of Globalisation” advocate for a morally enhanced globalization that retains economic strengths while addressing key shortcomings, particularly in Asia. It emphasizes three priorities: prioritizing sustainable development as globalization's core driver, fostering collective responsibility among consumers, producers, governments, and investors to value future generations equally, and addressing negative externalities through proactive government and institutional reforms. Achieving this vision requires a fundamental shift in mindset among those shaping global policies. This thought experiment underscores the need for a fairer, more sustainable global system capable of tackling pressing challenges in key regions like Asia while ensuring long-term prosperity for humanity.

Drawing on empirical evidence from Bangladesh, the article by Sinkovics et al. (2025) entitled “Negotiating the ethical terrain in global value chains on the road toward the SDGs” investigates ethical tensions between multinational enterprise (MNE) buyers and Bangladeshi apparel suppliers using a pattern-matching approach. It critically examines how differing ethical principles shape CSR and labor standards, identifying four scenarios: Legitimacy with friction, mitigated forced alignment, collaborative enhancement, and principled resistance. Highlighting the role of ethics in strategic decision-making, the study advances understanding of GVC governance and suggests that combining virtue ethics and consequentialist principles best supports a just transition in challenging developmental contexts.

Also, with an empirical approach, the article by Wu and Ma (2025) titled “Chinese firms’ contribution to local poverty alleviation: The role of inward FDI” argues that inward FDI is crucial for addressing poverty, a key SDG, yet its impact on domestic firms' poverty alleviation investments remains underexplored. Focusing on China’s poverty alleviation initiatives, the article examines subnational-level inward FDI’s social demonstration and industrial competition effects. Analyzing 14,428 firm-year observations (2016–2022), they find an inverted U-shaped relationship, intensified when foreign firms excel in financial performance and social contributions. These insights clarify FDI's nuanced role in poverty alleviation and guide policy in Asian economies.

Last, Sun et al. (2025) article titled “How does parent firms’ ESG disclosure affect overseas subsidiary financial performance? The case of Chinese Multinationals” argues that despite extensive research on ESG integration in MNEs, little is known about how ESG disclosures affect legitimacy spillover dynamics. Their article examines how parent firms’ ESG disclosures influence the financial performance of their overseas subsidiaries. Using data from 1364 subsidiaries across 31 countries (2010–2022) linked to 548 Chinese listed companies, they find a positive relationship between parent ESG disclosures and subsidiary performance. This effect strengthens with ESG policy alignment between home and host countries, business relatedness, and parent-subsidiary control, offering valuable insights into global ESG governance.

Solutions to MNEs’ Pursuit of the SDGs

Building on our early review of the literature and articles in this Special Issue, we propose novel, complementary perspectives on how MNEs could contribute to SDGs, which can be useful for guiding future research (Table 1).

Table 1 Potential actionable solutions and research avenues
Full size table

We argue that the interplay between corporate action, policy support, and global collaboration is essential for achieving a sustainable future, making MNEs indispensable partners in realizing the SDGs across Asia and beyond. By leveraging their global reach and resources, MNEs can embed sustainability principles into their strategies. This includes advancing the CSR agenda, promoting responsible practices across all value chain activities, adopting Environmental, Social, and Governance (ESG) standards, or driving innovation across industries (Zhao et al., 2024). Their extensive reach across GVCs positions them to propagate sustainable practices, foster inclusive growth, and address key SDG targets through responsible business practices, sustainable value chain strategies, and innovative solutions.

Furthermore, while effective governance, leadership, and voluntary frameworks guide MNEs' efforts toward sustainability, the impact of institutional contexts cannot be overlooked. When examining the evolution of institutional support for CSR in Asia, it is crucial to recognize that the dynamic development and innovation of institutions have opened new pathways for international collaboration between MNE and local enterprises (Liu, 2024b). Diverse approaches reflect Asia's unique sustainability landscape, where government leadership (e.g., through activities conducted by State-owned enterprises) and institutional support create opportunities (or challenges) for MNEs to contribute to SDGs, but where challenges in implementation remain (Marquis & Qian, 2014). Ensuring the effectiveness of these efforts requires continued collaboration and accountability, particularly in industries with high social and environmental risks. Let us begin with exploring the role of governments in promoting sustainable business practices and SDG sectors across Asia.

The Role of Governments in Asia and MNEs' Responsibilities

Governments in Asian countries promote the SDGs in various ways and play a critical role in supporting MNEs to contribute through a combination of policies, incentives, and regulatory frameworks. This creates a unique dynamic between public institutions and MNEs, at times fostering collaboration through public–private partnerships (PPPs) and targeted initiatives. Such PPPs often also involve international organizations (e.g., United Nations Development Programme) and MNEs in Asia—such as Mizuho Financial Group, Fujitsu, and Panasonic—to deliver innovative solutions for various types of SDG-related projects (e.g., disaster database development to providing solar lanterns to off-grid communities, UNDP, 2023a; 2023b). Governments are implementing targeted programs; for instance, India launched the "National Solar Mission" to expand renewable energy access, contributing to SDG 7 (Affordable and Clean Energy). SDG efforts can further be integrated into broader economic development strategies. Governments in the ASEAN region are also implementing fiscal and structural reforms to foster sustainable economic growth. Efforts like reintroducing budget deficit caps aim to stabilize economies while encouraging responsible business practices (JRI, 2023).

Policy frameworks compel corporations to align their operations with regional sustainability goals while adapting to stricter regulations. Nationally, China’s Environmental Protection Law has pushed MNEs to adopt sustainable business practices, such as reducing carbon emissions and investing in renewable energy (Fang et al., 2021). Japan's SDG Promotion Headquarters (2023) develops policy guidelines and provides corporate support, reinforcing the importance of public institutions in facilitating corporate contributions to sustainability. Governments also engage in cross-border actions. Through regulations, governments influence the adoption of sustainable business models that align with SDGs, such as circular economy practices focusing on waste reduction and resource efficiency. The Japanese government actively supports sustainable development through initiatives like the Carbon Capture and Storage (CCS) program, which fosters cross-border collaboration on environmental protection (Yanagi et al., 2023). These models are gaining traction across Asia, but concerns remain about the depth of corporate commitment to integrating sustainability into core business strategies (Mu & Lee, 2023).

These examples highlight how government interventions directly target certain key sectors, influence MNE sustainable strategies, and create an enabling environment for achieving SDGs. While many firms have embraced these practices, studies indicate varying levels of substantive implementation. For instance, Perry et al. (2015) highlighted compliance-driven CSR actions in South Asia’s garment sector, underscoring the tension between policy-driven compliance and genuine corporate responsibility. We will now discuss various strategies adopted by firms that explain how and why they can help contribute to the SDGs.

MNEs’ Sustainable Finance and ESG Strategies

Financing sustainable development projects is critical to achieving the SDGs, and MNEs play a key role in this process. By leveraging financial instruments such as green bonds and aligning their ESG strategies with global goals, MNEs can drive investments in renewable energy and low-carbon initiatives while simultaneously strengthening their financial resilience and market competitiveness. For example, China Construction Bank (CCB)’s issuance of green bonds illustrates a critical method for financing sustainable development projects—but it also highlights the need to build strong trust with investors during the capital-raising process (China Construction Bank, 2023). These green bonds have enabled significant investments in renewable energy and low-carbon projects, aligning with SDG 7 (Affordable and Clean Energy). Itochu Corporation's investments in energy efficiency projects generate societal value while improving corporate profitability. These cases demonstrate how aligning ESG strategies with SDGs, such as SDG 7 and SDG 9 (Industry, Innovation, and Infrastructure), can create synergies between business objectives and global development goals (UNDP, 2023a; 2023b).

Integrating ESG initiatives into strategies offers substantial opportunities and challenges for MNEs. Commitment to sustainability enhances corporate branding, attracts new customers, and secures investor trust, and as such MNEs raising their ESG performance can benefit from long-term competitive advantages. Aligning environmental outcomes with financial returns makes companies more attractive to investors and reduces corporate risks. For example, CCB's green bonds not only mitigate climate risks but also diversify revenue streams, offering a model for combining sustainability with profitability (International Finance Corporation, 2023). Itochu Corporation’s focus on improving energy efficiency reduces operational costs, supports profit maximization, and strengthens operational resilience. By embedding ESG principles into their core strategies, MNEs can overcome challenges and unlock significant opportunities. Their commitment to sustainability allows them to balance the demands of diverse regulatory environments, manage short-term costs, and position themselves as leaders in advancing global sustainability goals. Through innovative financing models, collaborative supply chain practices, and sustainable business strategies, MNEs can play a transformative role in fostering sustainable economic growth in Asia and beyond.

MNEs’ Sustainable Value Chain Strategies in Asia

Another route through which MNEs can contribute to the SDGs across Asia is by integrating sustainability within GVCs strategies, for instance in their efforts to minimize environmental impact and promote social equity. As key players in the world’s manufacturing hub, MNEs in the region hold substantial influence over supply chains, enabling the implementation of sustainable procurement, production, and distribution strategies. These efforts not only enhance operational efficiency and corporate reputation but also contribute directly to achieving SDGs. Examples of these strategies are evident across industries. In Vietnam, the shrimp aquaculture sector has embraced environmentally responsible practices such as water recycling systems and habitat restoration projects. These measures ensure minimal ecological impact while meeting global market demands, directly advancing SDG 12 (Responsible Consumption and Production) by promoting resource efficiency and environmental protection (APIR, 2022). Other examples include Japanese firms that have focused on reducing greenhouse gas emissions through life cycle analyses and the production of energy-efficient goods, aligning their operations with SDG 13 (Climate Action) (Keidanren, 2018).

Human rights due diligence is another crucial aspect of sustainable value chains in Asia, particularly in Southeast Asia, where risks of forced labor and other rights violations remain high. Thailand has taken significant steps by introducing its National Action Plan (NAP) on Business and Human Rights in 2019, becoming the first Southeast Asian country to align with the United Nations Guiding Principles on Business and Human Rights (UNGP). This has paved the way for Thai companies like Thai Union Group to adopt human rights-first approaches to their supply chain strategies (Thai Union Group, 2022). The company’s "SeaChange®" initiative exemplifies a collaborative model, involving partnerships with stakeholders such as the Migrant Worker Rights Network and the Issara Institute to conduct labor audits and establish grievance mechanisms. These efforts ensure transparency and social equity throughout the supply chain while adhering to international labor standards. Thai Union's achievements have earned it global recognition, including consecutive awards in S&P Global's sustainability rankings in 2021 and 2022 (MRI, 2023).

Across the region, companies are also adopting innovative technologies and engaging with stakeholders to promote sustainability. For instance, renewable energy and energy-efficient machinery are being integrated into production facilities to reduce carbon footprints. Furthermore, collaboration with international organizations like the International Labor Organization (ILO) and Verité helps establish best practices for labor rights and responsible sourcing. Progress toward sustainable supply chains is evident in other parts of Southeast Asia as well, driven by new regulations and active efforts from local and global MNEs. In Malaysia and Indonesia, for example, companies in high-risk industries such as palm oil and timber are adopting sustainable practices to meet global standards while maintaining market competitiveness (MRI, 2023).

CSR Activities and Contributions to Local Communities and Challenges

MNEs contribute by integrating CSR initiatives into their operations, addressing global socio-economic challenges, and tailoring their strategies to align with specific regional needs. Efforts to tackle societal challenges are multifaceted. For example, gender equality, a crucial component of the SDGs, has become a focus for industries like technology and manufacturing, where female representation is limited. MNEs also support sustainable city planning by investing in smart infrastructure and technologies to address the rapid pace of urbanization in regions like Southeast Asia.

These initiatives reflect the growing role of MNEs in fostering inclusive growth and sustainable communities (Asakawa & Clegg, 2024; UN-Habitat, 2009). Specific CSR interventions have further highlighted the impact of MNEs. Unilever's "Lifebuoy" soap campaign in Southeast Asia, for instance, addresses SDG 3 (Good Health and Well-being) by promoting hygiene education programs, reducing preventable illnesses, and enhancing public health practices (JETRO, 2021b). Similarly, Toyota has actively pursued reforestation initiatives and renewable energy adoption in Asia, aligning its operations with SDG 13 (Climate Action). Its traffic safety education programs and community-focused educational activities across Southeast Asia contribute to SDG 4 (Quality Education) and SDG 11 (Sustainable Cities and Communities) (JETRO, 2021a). Beyond public health and education, MNEs are also setting benchmarks in ethical practices across GVCs. The Aditya Birla Group in India has implemented sustainable sourcing methods that prioritize environmental protection and local community welfare, advancing SDG 12 (Responsible Consumption and Production) by promoting responsible consumption patterns and reducing environmental degradation (JETRO, 2021c). Similarly, Haier in China has launched energy efficiency programs across its supply chain, contributing to SDG 7 (Affordable and Clean Energy) by enhancing access to clean energy and lowering carbon emissions (JETRO, 2021b).

Despite the multiple CSR initiatives adopted by MNEs that can help achieve the SDGs, these often tend to be questioned. For example, Marquis and Qian (2014) found that many Chinese companies engage in symbolic CSR efforts to enhance their image without meaningful contributions. This "decoupling" between rhetoric and action undermines the credibility of CSR efforts and highlights the need for robust accountability mechanisms. Crilly et al. (2012) analyzed instances where firms adopted CSR practices to meet external stakeholder expectations without genuinely implementing them. Such symbolic practices may mislead stakeholders, creating a facade of responsibility while actual social or environmental impacts remain minimal, raising questions about the true intentions behind MNEs' CSR commitments.

Collaboration with governments and stakeholders further amplifies these efforts. In Laos, guidelines for responsible agricultural investments have been introduced to mitigate land disputes and environmental challenges, encouraging companies to align their practices with sustainability principles. These frameworks improve labor conditions and protect local ecosystems, demonstrating how targeted solutions can address region-specific challenges (JETRO, 2021c). The integration of CSR principles into MNE operations illustrates their potential to drive both global and local change. By embedding sustainability into sourcing strategies, improving supply chain transparency, and promoting energy efficiency, MNEs in Asia align their operations with broader societal and environmental goals. Collectively, these initiatives exemplify how responsible business practices not only advance SDGs but also create shared value for communities and industries across the region.

Significance and Challenges of Governance and Voluntary Codes of Conduct

Corporate governance and voluntary codes of conduct are critical frameworks that enable MNEs to advance sustainability goals while addressing global and local challenges. Governance within MNEs serves as the foundation for sustainable growth and accountability, ensuring that ESG principles are deeply embedded into corporate strategies. Senior managers play a pivotal role in steering policies and allocating resources, ensuring sustainability is integral to business operations. For instance, Mitsui Fudosan Co., Ltd. has established robust governance structures aimed at reducing environmental impacts and promoting sustainable development. The company’s policies reflect a commitment to aligning corporate objectives with broader societal and environmental goals (Authense, 2023). Similarly, Toyoda Gosei Co., Ltd. has integrated sustainability into its decision-making processes, embedding ESG objectives into its governance framework. These efforts illustrate how corporate governance can drive accountability and progress toward achieving the SDGs (Authense, 2023).

Many MNEs also create specialized sustainability committees led by senior managers to oversee the implementation of ESG strategies. These committees facilitate transparency through regular ESG reporting and foster collaboration with diverse stakeholders, including non-governmental organizations (NGOs) and community representatives. Such mechanisms ensure governance practices address societal and environmental challenges comprehensively. The examples of Mitsui Fudosan and Toyoda Gosei underscore how effective governance structures can position Asian MNEs as leaders in sustainable development, advancing global ESG and SDG standards. In addition to governance mechanisms, voluntary codes of conduct provide flexible yet impactful frameworks for promoting sustainability. These codes, such as the United Nations Global Compact (UNGC) and ISO standards, guide MNEs in addressing global sustainability challenges while balancing local compliance and cultural diversity. Tencent exemplifies this approach by establishing ethical standards for digital platforms, focusing on privacy protection and digital education. These efforts align with SDG 10 (Reduced Inequalities) by enhancing access to technology and safeguarding user rights (Tencent, 2023). Similarly, Uniqlo has adopted a responsible sourcing code to ensure supply chain transparency and fair labor practices, contributing to SDG 8 (Decent Work and Economic Growth) by improving working conditions and fostering economic development (Fast Retailing, 2023).

While voluntary codes offer significant benefits, their effectiveness depends on implementation and genuine commitment. For example, Tencent's digital ethics initiatives have increased user trust and extended educational opportunities to underserved populations, demonstrating how such frameworks can reduce inequalities. Uniqlo’s focus on transparency has enhanced its brand reputation and labor standards for garment workers. However, challenges such as cultural and regulatory differences, and the non-binding nature of these codes can limit their impact. Without enforceable regulations, adherence often relies on corporate goodwill, complicating monitoring and reducing perceived credibility (Kolk & van Tulder, 2010). To maximize the impact of voluntary codes, MNEs must strengthen monitoring mechanisms and adapt frameworks to local contexts. By aligning global standards with regional requirements, companies can address economic, cultural, and legal differences effectively. Initiatives like Tencent’s and Uniqlo’s demonstrate the potential of voluntary codes when implemented authentically, showcasing how these frameworks can contribute to global sustainability while maintaining competitiveness in diverse markets.

Corporate governance and voluntary codes, when effectively aligned and implemented, provide a comprehensive strategy for advancing sustainability within MNEs. By integrating these frameworks into their operations, MNEs can navigate complex global challenges, foster transparency, and drive significant progress toward achieving the SDGs. These efforts not only create shared value for stakeholders but also solidify the role of MNEs as catalysts for sustainable development on a global scale.

Future Research Directions: MNEs and SDGs in Asia

This section has reviewed how government actions and corporate strategies contribute to advancing the SDGs in Asia, mainly through the role of MNEs. Significant challenges persist while notable progress has been made through policy frameworks, CSR initiatives, and collaborative efforts. As discussed in the previous section, questions remain regarding the complexity of government policy initiatives and the depth of corporate commitment to fully embedding sustainability into their core strategies. In many cases, symbolic actions or compliance-driven measures overshadow genuine, substantive efforts. Addressing these limitations is essential to ensuring that MNEs in Asia continue to lead the advancement of sustainable value chains that drive meaningful progress toward the SDGs. To support this process, further research is necessary.

Critical areas for future research include the following. First, it is important to investigate how government policies influence MNEs' sustainability strategies across different countries. Comparative studies could identify mechanisms that foster effective collaboration between the public and private sectors, uncovering best practices for enabling MNEs to align their operations with SDGs. Second, the success factors and scalability of PPPs require further exploration. These partnerships have shown potential in addressing key SDG challenges, such as renewable energy access and disaster management. Research could examine how PPPs operate and under what conditions they succeed, providing replicable models for broader implementation across industries and regions. Third, there is a need to assess the authenticity of corporate commitments to sustainability. Many MNEs publicly endorse SDG-aligned initiatives, but questions persist about whether their efforts are genuinely impactful or merely symbolic. Investigating the factors that distinguish substantive efforts from superficial ones can help build trust in corporate sustainability initiatives and maximize their social and environmental benefits. Fourth, advancing sustainable value chains demands greater scholarly attention. MNEs in Asia operate within complex global supply chains that require balancing economic competitiveness with social and environmental responsibilities. Research should explore strategies for achieving this balance, particularly in high-risk industries such as manufacturing and agriculture, where sustainable value chains play a vital role in SDG progress. Lastly, the integration of ESG principles into corporate strategies, as well as the role of financial innovations like green bonds, merits further study. Research in this area could provide insights into how ESG-focused financial instruments shape MNEs' contributions to the SDGs and offer pathways for aligning business objectives with sustainability goals.

By addressing these research areas, scholars can deepen academic understanding and offer actionable strategies for building a sustainable and inclusive future. This research has the potential to position MNEs as transformative agents of change, driving meaningful progress toward global development goals in Asia and beyond.

Conclusion

The adoption of the SDGs in 2015 offered a global blueprint for addressing urgent societal and environmental challenges, spanning poverty, inequality, and climate change. Despite global efforts, progress remains uneven, hampered by factors such as the COVID-19 pandemic, geopolitical tensions, and rising resource demands. MNEs are key players in advancing the SDGs, and a growing body of research explores their strategies, impacts, and contributions. In this introductory article, we have provided an overview of the literature on the topic which suggests there is insufficient scholarly attention paid to Asia. This Special Issue thus offers a timely, in-depth narrative on MNEs and SDGs in Asia, a region central to global FDI flows and economic growth. Asia’s unique institutional environments and dynamic economies present opportunities to study how MNEs contribute to sustainable development. In light of this, we put forth several solutions to guide future research directions. We encourage future scholars to engage with the Asian context seriously and deliberately to answer these important research questions and to develop powerful solutions for sustainable development in both Asia and beyond. Against the ongoing global turbulence and continuous disruptions, SDGs are important driving forces and deserve sustained attention and collaborative efforts for our humanity and the natural environment.