Today this is no longer news: the integration of sustainability strategies within companies’ internationalization plans is already an imperative for large companies and is increasingly pressing for SMEs as well. A kind of cascading effect that starts with the large ones until it reaches and increasingly involves the small ones, resulting in the need to focus these strategies according to the countries in which they intend to internationalize.
We have already mentioned the issue of Environmental Sustainability applied to internationalization strategies. No less so is that of Social Sustainability in internationalization strategies. In fact, among ESG levers, Social Sustainability assumes the greatest relevance globally as it relates to the well-being of people and communities in general.
We discuss the relevance of the Social Sustainability lever in internationalization strategies in this very in-depth article.
Social sustainability and the SDGs: a focus
The SDGs related to the social dimension can be traced to the following themes:
- Access rights to resources (SDGs 1, 2 and 6)
- Rights of access to basic services (SDGs 3 and 4)
- Initiatives to reduce inequalities (SDGs 5 and 10).
Wanting to focus attention on what different countries around the world have achieved on the various issues, the data published by the UN last June 2023 in its annual report on the advancement of the 2030 Agenda goals provide us with an interesting overview of the paths taken by individual countries and, more generally, of the situation in global macro-areas. Below are some concrete examples.
Rights of access to resources (SDGs 1, 2 and 6)
Among these areas, the one on which there is currently the greatest interest is that related to zero poverty in the world, where several countries between North and South America, particularly Canada and Brazil, are achieving excellent results. There is also a particularly strong push on these issues on the eastern front, with several virtuous countries including Russia, India and China, which, however, because of their marked diversity in terms of needs and context, remain among the most complex markets to attack when it comes to internationalization.
On the other hand, a much debated but still little addressed issue at the global level concerns the reduction of world hunger: there are still few countries that have begun to move in this direction. Two examples in this regard: China and Algeria.
Rights of access to basic services (SDGs 3 and 4)
Rights of access to basic services also include issues related to health and schooling. Both are actually very interesting fronts for almost all areas of the world, especially on the eastern side. In particular, with regard to access to educational services, some countries in the East, such as Indonesia and Mongolia, appear to be particularly virtuous and have already achieved significant results. But also on the Western front, both North and South America are implementing various initiatives in favor of these services.
Inequality Reduction Rights (SDGs 5 and 10)
This theme concerns both the reduction of inequalities in general and gender inequalities specifically. On the latter aspect, in particular, the most active countries belong to the European continent and the Americas. These are then joined by some virtuous countries in the south of the African continent such as Congo, Kenya and Zambia. On the inequality reduction front more generally, however, data are lacking for many of the countries on the African continent, but in general still a few are working to improve, including the United States.
Social sustainability and internationalization: benefits and challenges for companies
It would be pointless to deny that the inclusion of Social Sustainability strategies within an internationalization project offers numerous benefits, but also significant challenges to be faced:
Among the benefits a company can gain are
- improved global reputation
- increased attraction of global customers
- increased interest from investors sensitive to these issues
Among the challenges to be sustained:
- addressing cultural and regulatory differences in different markets
- ensuring respect for workers and local social norms
- incurring additional costs and requiring investment in staff training and development
However, a genuine commitment to social sustainability can help create a positive impact globally, bringing lasting benefits to the company and society as a whole.
Final thoughts
Social Sustainability is a fundamental aspect in the construction of strategies for sustainability that cannot be separated from the formulation of strategies for internationalization, which in fact must also assess the characteristics of the social context within which one wants to internationalize in order to understand how best to position oneself and propose oneself to one’s targets.
Integrating Social Sustainability into internationalization paths allows companies to increase their competitive advantage through initiatives that contribute to the improvement and enhancement of the territory with obvious benefits in terms of communication and better insertion in the target country.
As always, however, it is important to do it 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 target 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.
