Bezpośrednie inwestycje zagraniczne a równoważenie rozwoju Unii Europejskiej: aspekty ekologiczne
Foreign Direct Investment in the Process of the Sustainable Development of the European Union: Ecological Aspects

Author(s): Janina Witkowska
Subject(s): Economy
Published by: Wydawnictwo Uniwersytetu Łódzkiego
Keywords: European Union; foreign direct investment (FDI); sustainable development; green business; investment policy
Summary/Abstract: This chapter aims to examine the role of foreign direct investment in the process of sustainable development of the EU and to answer two questions: (1) to what degree could international business contribute to the development of a “green economy” under uncertainty caused by pandemic COVID-19?; (2) in which way could host countries attract “green” and socially responsible foreign direct investment (FDI)? The statistical analysis of international business involvement in the EU economy in environmentally harmful sectors/industries indicates that the share of such investments in most member states did not exceed 20% of the total FDI stocks in 2015–2020. The structure of investments changed in the case of half of the analyzed countries towards sectors/industries that were less harmful to the environment. These changes allow concluding that international business contributed to the ecological transformation of the EU. On the other hand, changes in the structure of FDI stocks located abroad by the EU Member States in 2015–2020 in environmentally harmful sectors/industries were multidirectional. The involvement of foreign direct investors in the new EU Member States in sectors important for implementing the Sustainable Development Goals – SDGs of the 2030 Agenda was not very high. It was characterized by high volatility and did not play a significant role in their economies. Attracting “green FDI” and socially responsible investments requires changes in the policy towards foreign investors. These should include facilitating foreign investment aimed at sustainable development, incentives for investors to engage in “green investments”, and making investment agreements more flexible to combat climate change.

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