MNCs and sustainable business practice: The case of the Colombian and Peruvian petroleum industries

Multinational corporations (MNCs) play an increasingly important role in the economic development strategies of many less developed countries (LDCs). At the same time the sustainable development of LDCs requires economic growth to be accompanied by environmental protection and greater social equity. This paper contributes to the literature concerned with MNCs' contribution to the sustainable development of LDCs. The concept of sustainable business practice (SBP) is proposed as relevant to understanding MNCs' contribution, and an analytical framework incorporating the content, context, and process of SEP is used to examine what SEP might consist of, as well as those conditions important for its widespread adoption. Results from a study examining the Colombian and Peruvian petroleum industries show that despite important contributions by MNCs to sustainable development, SEP is not yet widespread. The study also shows the importance of external institutional pressures-principally in the form of local legislation-for MNCs' contribution to the sustainable development of LDCs. Finally the paper shows how the process of change toward more SBP is closely linked to the external context in which MNCs operate, the characteristics of their internal context, and the internal and external processes linking these contexts. (C) 2001 Published by Elsevier Science Ltd.