How foreign direct investments support the green transformation

It will not come as a surprise that investment from multinationals can support the acceleration of innovation and proliferation of green technology, however a recent report from a number of academics shows that such investments can increase the sustainability focus of the multi-technology corporation investors.

Using patent filing data as an indicator of innovation, the authors of this report set out how green foreign direct investments can impact the technological focus of the investor, both in terms of the share of patents that are in green technologies and the overall number of patents filed to green technologies. This is interesting as discussion around the effect of such investments typically is focused on the recipient of the investment.

It is suggested that, while multinational enterprises can have a negative impact on the green transformation through hindering the implementation of green legislation, they may also play an important role in achieving net-zero goals through the progress resulting from green foreign direct investments.