Analyzing the Influence of Foreign Direct Investments on Sustainable Development in Developing Countries

Abstract

This paper explores the multifaceted role of Norwegian energy companies in guiding Foreign Direct Investments toward sustainable development in Brazil, focusing on the interplay between environmental stewardship, socio-economic advancement, and sustainable leadership. The research delves into the dual crises of climate change and socio-economic inequality, highlighting the imperative of addressing both simultaneously to achieve global sustainability goals. Through comprehensive field research and qualitative interviews with key stakeholders, including energy companies (Equinor, Hydro, Hydro Rein, Yara & Statkraft), governmental bodies, NGOs, and local communities in Brazil, this study critically examines the environmental and social impacts of Norwegian FDIs. The findings underscore the potential for significant positive contributions, such as advancements in renewable energy and improved social welfare, while also revealing instances of environmental degradation and social displacement. The thesis identifies key strategies employed by Norwegian energy companies, including stakeholder engagement, sustainable leadership, and adherence to international sustainability standards like the Corporate Sustainability Reporting Directive (CSRD). It emphasizes the importance of tailored approaches to stakeholder mapping and engagement, particularly in developing countries with unique socio-economic challenges. In the context of Norway's progressive environmental policies and Brazil's complex socio-economic landscape, the research provides a nuanced comparison of the impacts of FDIs on sustainable development. It highlights the ethical considerations and responsibilities of Norwegian companies in ensuring that their investments not only generate economic benefits but also contribute positively to the host country's development. The study also addresses significant research gaps, particularly the need for a deeper understanding of the social aspects of FDIs and the role of sustainability leaders in driving these investments. It advocates for more ethical and holistic FDI strategies that consider the long-term environmental and social impacts. By exploring the complex narrative of Norwegian energy companies' operations in Brazil, this thesis contributes to the broader discourse on sustainable development, offering valuable insights into the future of global sustainability and the critical role of responsible investment practices.