Making FDI More Sustainable: Towards an Indicative List of FDI Sustainability Characteristics

Abstract

Reaching the Sustainable Development Goals has become the lodestar of development policymaking. Increased sustainable Foreign Direct Investment (FDI) flows to developing countries can contribute to reaching the Goals. This article analyzes 150 instruments (treaties, standards, codes) prepared by key stakeholder groups in the FDI space bearing on the relationship between host countries and foreign investors, to identify FDI sustainability characteristics along the following four dimensions: Economic, social and environmental development and governance. These instruments indicate especially the contributions government expect multinational enterprises (MNEs) to make to host countries and those MNEs expect to make to host countries. The analysis yields a set of indicative 'common FDI sustainability characteristics', and 'emerging common FDI sustainability characteristics'. These characteristics can guide various stakeholder groups that seek to increase the contribution of FDI to development; the World Trade Organization's Structured Discussions concerning an investment facilitation framework for development; and to arbitrators seeking to take the development dimension into account when deliberating investor-state disputes.