The Corporate approach to Sustainability in Eurasia: Powerful leaders or passive observers.

Public interest and the narrative of sustainable development goals (SDGs) have traditionally been an area of States’ responsibility and expertise. States have been considered to be in the best position to lead and coordinate the sustainable development effort. The classic profit-seeking paradigm has provided private firms with little incentive and capacity to tackle social and environmental problems that presumably created nothing but costs for them.
Today, business leaders increasingly acknowledge the damaging effect of the short-term commercial focus and call for greater responsibility and commitment to deliver SDGs. They embrace the sustainable development agenda as a tremendous economic opportunity and exercise an unprecedented economic and political influence across various jurisdictions.
This paper argues that insufficient domestic institutions, existing in many developing countries, pose the challenge of achieving growth with a greater focus on SDG investments and confer even higher expectations on business to deliver sustainable development targets. In many developing economies, regulatory policies and market-based mechanisms have a limited effect on sustainable corporate behavior. National legislation often fails to adequately regulate corporate incentives and introduce efficient rules that reward meaningful sustainable activities. Limited capacity or reluctance to improve legislation deteriorates the attractiveness of these countries to a growing number of foreign investors dedicated to SDGs. Most of these funds still go to developed countries, leaving the developing world far behind. The Covid-19 pandemic has again demonstrated that developing economies are much more vulnerable to the crisis deepening an inequality gap. In this context, businesses can play a powerful leadership role by urging governments to address the structural and institutional barriers. This role reinforces pressure on corporations to review their own business models.
Although researchers argue that business usually demonstrates a reactive strategy towards SDGs, the impact of corporations on the global SDG frame as well as how the role of corporations changes in a varying context, requires further attention. The current crisis offers a unique opportunity to study corporate engagement from the viewpoint of developing countries that suffer more severe socio-economic consequences of the global pandemic.
This paper sheds light on the following questions: How do corporations approach sustainability issues when the government hardly sets its expectations for sustainable behavior? How does business address this government failure? To what extent can business compel governments to pursue sustainable development reforms? What are the implications for the role of business and the broader global vision of SDG values?