Foreign Direct Investment Qualities and Impact

With a substantial increase in the funding gap to meet the SDGs, and the urgent need to accelerate investment to combat climate change and achieve the digital transition, FDI is even more important. By facilitating cross-border capital flows and fostering knowledge diffusion, FDI serves as a vital source of financing and job creation. Yet benefits are not automatic and are often not well understood. Foreign investment, like domestic investment, can have adverse impacts on sustainable development when firms degrade the environment, offer poor working conditions, or exacerbate gender inequality.

Understanding the benefits and potential costs of FDI is imperative for making policy adjustments that promote and facilitate sustainable investment. The OECD FDI Qualities Indicators provide governments with essential data to gauge FDI’s impacts on the economy across crucial areas such as decarbonisation, gender equality, job quality and upskilling, innovation, the digital economy, and regional development.

Through collaborative partnerships, capacity-building initiatives, and knowledge-sharing, the FDI Qualities Initiative strives to foster a conducive environment for sustainable investment that drives long-term economic prosperity, social progress and the green transition. The Initiative supports governments both within the OECD and across diverse regions including Africa, Asia, Eurasia, Latin America and the Middle East. It also informs global policy debates at foras like the G20, G7 and APEC.

The FDI Qualities Policy Network is an established multistakeholder group that guides the Initiative through policy dialogue and cross-areas technical discussions. It includes government officials from investment, development and other policy communities across OECD member and partner countries, representatives from the private sector and civil society, and experts from other international organisations and academia.