The innovative contribution of multinational enterprises to the sustainable development goals

ABSTRACT The 2030 Agenda recognizes the role of the private sector and calls on its innovative and creative capabilities to help solve sustainable development challenges. Judging by the embracement of the SDGs in sustainability reporting, this call seems to resonate. However, the extent to which companies actually make a contribution to solving SDG challenges remains unclear. This paper aims to explore this innovative contribution to the SDGs. It does so by assessing the level of SDG relevant innovation by the largest multinational enterprises in the world. We develop a method for the identification of SDG relevant patent applications, distinguishing between “green” patents, related to environmental themes, and “blue” patents, related to “improving conditions” and meeting unmet sustainable development needs. In addition, we explore whether the level of SDG relevant innovation is systematically associated with a number of company characteristics. Our results show that large MNEs have similar levels of green patents, and lower levels of blue patents, compared to smaller companies. Using regression analysis, we find that there are regional and industry-specific differences. Corporate sustainable development attributes such as Global Compact membership and sustainability reporting, are less convincingly associated. It can be concluded that MNEs play an important role in SDG relevant innovation, but that there are trade-offs between different SDGs. Some SDG relevant innovation is not commonly associated with sustainable development. This study attempts to quantify the actual effect of sustainability strategies of companies by identifying their sustainable patents and associates this to company characteristics, using a new method for sustainable patent identification. Moreover, SDG relevant innovation is taken beyond green innovation to include the whole range of technical innovation that is related to the broad range of SDGs.