Managing Environmental Impact

This working paper by the World Resources Institute analyzes environmental and social risk management for overseas investments, specifically providing lessons for Chinese companies. Through six case studies of non-Chinese multinational companies, the paper demonstrates that strong risk management benefits companies, while weak management leads to financial loss and reputational damage.

• The World Resources Institute's analysis of six non-Chinese multinational case studies indicates that robust environmental and social risk management provides benefits to companies, whereas poor management can lead to "profit losses and reputational damage."
• Chinese outward foreign direct investment (OFDI) grew by 8% during the 2008-2009 financial crisis, a period when global FDI fell by 40%. In 2012, Chinese investors put US$77.22 billion into 141 countries and regions, representing a 28.6% increase from 2011.
• The paper recommends four primary strategies for Chinese companies investing overseas: abiding by host country laws (or implementing stronger internal standards if local laws are weak), understanding local political and cultural contexts, coordinating with diverse stakeholders to gain community support, and adopting international industry best practices.
• The document outlines specific recommendations for Chinese institutional actors: the government should integrate overseas investment impacts into domestic environmental management; financial institutions should learn from multilateral development banks and improve risk management policies for loans; NGOs should act as bridges between investors and communities; and media should collaborate with foreign counterparts for fact-finding.
• Case studies illustrate the consequences of poor risk management: Freeport-McMoRan faced human rights and environmental issues in Indonesia; BHP Billiton withdrew from Papua New Guinea in 2001 after polluting the Ok Tedi River and Fly River basin; Newmont Mining caused relocation of nearly 10,000 people and a cyanide spill in Ghana; Sime Darby suffered financial losses in Liberia due to land ownership tensions; Asia Pulp & Paper faced boycotts over deforestation in Indonesia; and the Camisea project in Peru became controversial due to partial responsibility for environmental protection.

APA

World Resources Institute (n.d.). Managing Environmental Impact. https://www.wri.org/research/managing-environmental-impact

Chicago

World Resources Institute. Managing Environmental Impact. n.d. https://www.wri.org/research/managing-environmental-impact.

Wikipedia

{{cite report |author=World Resources Institute |title=Managing Environmental Impact |url=https://www.wri.org/research/managing-environmental-impact |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldresourcesinstitutendmanaging, author = {{World Resources Institute}}, title = {{Managing Environmental Impact}}, institution = {World Resources Institute}, url = {https://www.wri.org/research/managing-environmental-impact}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }