We have come to take for granted the size and sweep of modern multinational corporations. As companies merge to gain scale, it’s difficult to keep track of the corporation behind the brands we buy. Daily, we dress ourselves in clothes bearing labels of “made in” notices for countries that may be difficult to place on a map. We know that our vehicle, as well as our cell phone, was not made in an individual factory but assembled from components and parts made across a dispersed global supply chain. When out of season locally, we may notice that our fruit and vegetables may have come from distant lands. Multinational corporations seamlessly bring together many essential things in our daily lives.
Over the years, these multinational companies have grown to scales that may surprise us. While not an apples to apples comparison, the largest companies have annual revenues that dwarf the gross domestic product (GDP) of many countries. Some may be able to recite the top five global economies:
- United States ($20.5 trillion)
- China ($13.5 trillion)
- Japan ($5 trillion)
- Germany ($4 trillion)
- United Kingdom ($2.8 trillion)
Readers may be surprised to learn that Walmart, with over $500 billion in annual revenue, would rank #25, displacing Thailand. The fourth largest company, Royal Dutch Shell, displaces the Philippines at #40. The ninth largest company, Exxon Mobil, comes in just behind the Czech Republic, the 46th largest economy. At #11 among companies, Apple had a billion dollars more in revenue than Peru (#51 among countries) had in GDP. Foxconn, the 24th largest company, has greater annual revenue than the GDP of Kuwait (#58 in GDP). In all, 41 of the 100 largest economic entities on the planet would be corporations.
So, what does that mean for us? While policies and laws and regulations from countries are essential, companies play a critical role in addressing environmental and social issues such as climate change, food justice, health, human rights, and water stewardship. At bottom, the decisions that companies make have a tremendous impact on the most vexing global issues. In fact, choices made by companies, in many contexts, have greater impact than individual countries.
Michael Porter, in a 2015 TED Talk, underscored the importance of business in addressing critical problems. Global norms have been shifting. It is no longer acceptable for multi-national companies to simply meet the legal minimums set by local governments. Today, many international standards, including the UN Guiding Principles for Business and Human Rights, underscore the role of companies. Some of our resolutions with companies this year reflect this emerging understanding of the role of companies in addressing human rights.
The work of SGI contributes to the work of so many others– socially-conscious consumers, non-profit organizations, workers in the supply chain, and ethical executives– in seeking a more just and sustainable world.
Given the scale of multinational corporations and global nature of our economy, our mission is more critical than ever.