Where to apply Environmental Sustainability in internationalization strategies?

Today, talking about internationalization strategies can no longer ignore the issue of Environmental Sustainability. Hence the growing importance of building and implementing all-inclusive strategies that on the one hand push on the internationalization of the company to increase its competitive advantage and on the other hand weigh in the right way both the actions aimed at environmental sustainability with reference to the target countries where it is intended to reach, and the sensitivity on ESG issues of those target countries.

Indeed, it cannot be denied that the topic of Sustainability, taken in its more general totality, is vast and multifaceted. We have already spoken in the past about how it is possible to create a link between Internationalization and Sustainability, two worlds that are distant only in appearance, going so far as to speak of Sustainable Internationalization. And we have also emphasized several times how the approach to sustainability must necessarily stem from a 360-degree vision focused on understanding what it means to be a sustainable company and how this commitment to sustainability can be translated into targeted initiatives within internationalization strategies.

In this complex web, where to apply Corporate Sustainability in internationalization strategies?

SDGs for corporate sustainability.

The topic of corporate sustainability is linked to the Sustainable Development Goals – SDGs in the English acronym, referring to the United Nations 2030 Agenda for Sustainable Development. There are 17 development goals and they serve as a global compass toward a path that is, indeed, more sustainable.

With reference to these goals, last June 2023 saw the publication of the annual progress report on the status with respect to the paths taken by individual countries and, more generally, on the situation in global macro-areas.

In addition to having an overview of what is happening, the report is a useful tool to get a timely view of the weight that countries around the world are giving to the different issues to be addressed according to their characteristics and needs.

Where does this diversity of orientation come from?

It stems from the complexity and vastness of the topic of Corporate Sustainability, which, as anticipated, encompasses a wide variety of possible initiatives that in turn respond to even very different goals.

To give an idea of what the main strands of activity on this topic are, some of the SDGs of the 2030 Agenda can be taken as a reference on 3 major thematic areas:

  • the search for clean energy sources (SDG 7)
  • the fight against climate change (SDG 13)
  • the protection of biodiversity at sea and on land (SDGs 14 and 15)

A focus on how corporate sustainability ties in with internationalization strategies

It goes without saying that internationalization strategies, in order to create the coveted value and competitive advantage for the company embarking on such a path, cannot ignore timely awareness of two factors:

  • The implementation of initiatives targeting the right SDGs that become an integral part of the internationalization journey
  • The importance attached to that specific SDGs by the target country of the internationalization strategy

Let’s take some real-world examples.

Focus on the search for clean energy sources (SDG 7)

Reasoning on the topic of clean energy, today the most advanced countries are certainly those in Northern Europe such as Norway, Finland and Denmark, which have already achieved significant results. However, there is a great deal of global attention on the issue, partly as a result of the delicate geopolitical situation on energy supply resulting from the conflict in Ukraine. Indeed, in recent years, other countries, such as those in Latin America or Southeast Asia (India and China), have also launched numerous initiatives aimed at research and transition to sustainable energy sources.

Focus on combating climate change (SDG 13)

On the other hand, as far as climate change aspects are concerned, to date most of the virtuous countries are located in the Sub-Saharan Africa area, where many are already found to be in line with what the 2030 Agenda calls for. In addition to these, other countries that are launching important initiatives on the issue are those in Latin America, such as Colombia and Argentina, as well as those in the Middle East and Central Europe.

Focus on protecting biodiversity at sea and on land (SDGs 14 and 15)

On the issue of biodiversity protection, however, there is still much to be done. To date, it is the countries on the European continent that lead the ranks of the virtuous and have launched numerous initiatives for the conservation of both terrestrial and marine ecosystems. On the latter, in particular, North American countries are also launching numerous initiatives, with a clear increase in awareness on the issue.

Hence a practical inference: given the framework, internationalization strategies will necessarily have to include Environmental Sustainability with reference to the target country. If the company decides to embark on an internationalization path to the United States, the sustainability plan will consider very different elements, actions and objectives than if the same company decides to expand to Ethiopia.

Final words

Environmental sustainability and internationalization strategies are increasingly interconnected in today’s global economic landscape. Companies that successfully integrate these two aspects can achieve significant competitive advantages, such as:

  • developing a positive reputation in domestic and international markets, aiming to attract environmentally sensitive customers and investors
  • the stimulation of innovation, pushing a greater diversity of perspectives and approaches and developing new products
  • the increased resilience to uncertainties and rapid market changes

The interconnection between environmental sustainability and internationalization strategies is therefore very strong. Companies can gain a new competitive advantage and access new sustainable markets and resources by reducing and diversifying environmental and economic risks.

But it needs to be done with awareness and proceed methodically. We at Roncucci&Partners have been helping Italian SMEs face the challenge of foreign markets for more than 20 years and, today as then, we are able to structure an organic internationalization path that also takes into account the sustainability dimension depending on the destination countries.

 

At Roncucci&Partners we help companies develop themselves and their business, embrace change and evolve to thrive in a world that is increasingly complicated, insidious and requires great expertise. We do this by applying punctual methods and rigorous strategies, the result of many years of experience and the richness of the numerous success stories we have conducted all over the world. Passion and method are indeed our guides to enhance the present and build the future.

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