Whereas environmental conditions are improving in many developed countries, environmental degradation is still widespread. Multinational enterprises could play a central role in solving or fuelling these global environmental problems. They could help to transfer clean technologies and sustainable management practices to less developed regions or they may shift polluting production to developing countries with lower environmental standards. Here we use a unique geospatial panel of millions of multinational and domestic companies to quantify their impact on the environment in Africa. We show that an expansion of multinational activity causes severe loss of forest cover, erodes local crop diversity and, to some extent, increases greenhouse gas emissions. Further, we find that the adverse environmental impact of multinationals is significantly larger than the impact of domestic firms. Our results highlight the trade-offs that many developing countries face, and we also suggest a solution to this dilemma.

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12 May 2026

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Nature Climate Change 2026

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DOI: 10.1038/s41558-026-02637-6

https://www.nature.com/articles/s41558-026-02637-6#article-info

This Journal article is published under the centre's Trade programme.