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Reputational Risk Under MNCs Environmental Violations

by Sumiah Bagazi


Multinational Companies (MNCs) have negative impacts on human rights, especially the right to a clean environment. MNCs have caused deterioration of the environment and wide range of human rights violations, such as displacement; and threats to life, expression, health, and property rights protected by the human rights declaration. A Host state constitution, law, and international commitments govern the MNCs operations, including human rights.

The responsibility to respect environmental standards is spread among all stakeholders. Host states, home states, and MNCs could be reluctant to implementing human rights. Nonetheless, not only should host and home states enforce human rights on MNCs because of their human rights ratification but also prevent reputational risks. States’ active or passive participation in environmental degradation raises reputational risks that eventually causes financial loses to all parties, host state, home state, and the MNCs itself. This blog will examine reputational risks to MNCs, host state, and home state as a result of MNCs’ environmental and human rights abuses.

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