UN World Investment Report 2010 - Office of Trade Negotiations

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CHAPTER IV Leveraging Foreign Investment For A Low-Carbon Economy 113 Box IV.4. TNCs’ climate change-induced investments, 2009 UNCTAD annually carries out a survey of the largest TNCs and the investment plans they hold for the two years to come. The 2010–2012 survey results, based on some 240 TNCs, give some insights into climate change-induced investments. Although the findings should be treated as illustrative rather than conclusive since the survey was not primarily concerned with climate change issues, there are some interesting results. For example, 45 per cent of respondent TNCs across all industries indicated that host countries’ GHG emissions reduction needs and policies were taken into consideration in their plans; 31 per cent had made cross-border acquisitions to obtain technologies and other created assets related to emission reductions; and 32 per cent exploit their own technologies, know-how and skills pertinent to GHG emission reductions in their foreign investments. These findings differ somewhat by industry. For instance, 37 per cent of respondent TNCs in chemicals and chemical products have a limited (5–10 per cent of total FDI), significant (10–20 per cent) and very significant (more than 20 per cent) share of climate change induced investments in their total foreign investments, compared to an average level of 30 per cent for manufacturing as a whole. The equivalent share for TNCs in transport, storage and communications was 40 per cent, compared to 32 per cent in all services. Box table IV.4.1. Share of climate-change induced investments in TNCs’ foreign investments Sector/industry Nil Limited (up to 10%) Significant (10% to 20%) Important (more than 20%) Unknown Number of responses Primary Manufacturing Chemicals and chemical .. 18 .. 45 .. 11 .. 5 .. 21 7 106 products Electrical and electronic 16 42 21 - 21 19 equipment Services Trade Transport, storage and 11 27 40 53 40 40 11 5 - 5 8 5 21 19 15 19 62 20 communications 27 40 13 7 13 15 Total 21 46 9 6 19 175 Source: UNCTAD, forthcoming a. Note: Based on 175 responses. Source: UNCTAD. of companies with advanced technologies in renewable electricity generation in many of these economies. Established power utilities top the list of the TNCs most actively investing in renewables (table IV.3), suggesting that low-carbon process investments dominate. The emergence of new players, either new companies or established ones crossing over from other sectors, indicates growing competition in this field. So does the nearly 10 per cent share of investment projects, in number, held by TNCs from developing countries, the bulk of which are South-South (table IV.3); these investments are concentrated among a small number of TNCs, which are primarily utilities or conglomerates. 30 Judging from greenfield investment data, low-carbon FDI in recycling has been more modest (a total of 191 cases during 2003–2009), but this small number may be more apparent than real because such activities are often not reported separately. As in renewable/alternative power generation, about two thirds of projects are in developed countries. Investors range across a large number of industries, mostly manufacturing, suggesting that most of these projects focus on reducing emissions in these TNCs’ own operations or along their value chain. The presence of TNCs such as Veolia (France) and Norsk Hydro (Norway), however, suggests that some may be investing in host countries to offer low-carbon technology services
114 to local enterprises (see also WIR08). Apart from Sembcorp (Singapore) and Chuang Tieh (Taiwan Province of China), very few developing country TNCs appear to be investing in recycling. Greenfield investments in the manufacturing of environmental-technology products (806 in total during 2003– 2009) – such as wind turbines, solar panels and biodiesel plants, as well as associated parts – has expanded rapidly since 2003. World Investment Report 2010: Investing in a Low-Carbon Economy Table IV.3. Top 20 investors of greenfield investments in alternative/renewable electricity generation, 2003–2009 TNC name World Developed economies Developing economies South-East Europe and CIS Iberdrola (Spain) 33 29 4 - Electricite de France (EDF) (France) 21 18 3 - E.On (Germany) 21 21 - - Acciona (Spain) 16 10 6 - Enel (Italy) 16 13 3 - RWE (Germany) 14 13 - 1 OPDE (Spain) 12 12 - - Energias de Portugal (EDP) (Portugal) 12 12 - - Endesa (Spain) 11 4 7 - Econcern (Netherlands) 10 8 2 - Vattenfall (Sweden) 9 9 - - BP (United Kingdom) 9 9 - - Enex (Iceland) 8 7 1 - National Toll Roads (NTR) (Ireland) 8 8 - - Mainstream Renewable Power(Ireland) 8 2 6 - Fersa (Spain) 7 3 4 - NeoElectra (France/Spain) 7 7 - - Gamesa (Spain) 7 5 2 - AES Corporation (AES) (US) 7 2 4 1 Sowitec (Germany) 7 3 4 - Source: UNCTAD, based on data from the Financial Times, the FDiIntelligence database (fdiintelligence.com). Developing economies are becoming increasingly popular investment destinations in this industry, attracting more projects than developed economies over the past two years. Nearly half of the 806 reported investments over 2003–2009 are in developing countries, over 85 per cent of which involved developed country TNCs. Investments are occurring in a number of developing countries, with Algeria, Argentina, Brazil, China, India, Indonesia, Libyan Arab Jamahiriya, Malaysia, Mexico, Mozambique, Philippines, Singapore, South Africa, United Republic of Tanzania and Viet Nam, among the largest or key recipients. These investments focus on low-carbon products, mostly with businesses as customers. Very few of the TNCs mentioned in table IV.4 – apart from the likes of General Electric (United States) and Siemens (Germany) – are established players in this field, Table IV.4. Top 20 investors of greenfield investments in environmental technologies manufacturing, 2003–2009 TNC name World Developed economies Developing economies South-East Europe and CIS Vestas Wind Systems (Denmark) 21 13 8 - Siemens (Germany) 13 7 5 1 General Electric (GE) (United States) 13 3 10 - Abengoa (Spain) 12 10 2 - BP (United Kingdom) 12 10 2 - LM GlasFiber (Denmark) 11 7 4 - Areva Group (France) 10 6 4 - SW Umwelttechnik Stoiser & Wolschner (Austria) 10 10 - - Sanyo Electric (Japan) 9 6 3 - Alstom (France) 8 - 8 - Kyocera (Japan) 8 2 6 - BioDiesel International (BDI) (Austria) 7 7 - - Hyflux (Singapore) 7 - 7 - Bronzeoak (United Kingdom) 6 - 6 - Archer Daniels Midland (United States) 5 1 4 - First Solar (United States) 5 2 3 - D1 Oils (United Kingdom) 5 - 5 - EVN (Austria) 5 1 1 3 Owens Corning (United States) 5 - 5 - Carl-Zeiss-Stiftung (Germany) 5 5 - - Source: UNCTAD, based on data from the Financial Times, the FDiIntelligence database (fdiintelligence.com).
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United nations ConferenCe on trade
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PREFACE The global financial and ec
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TABLE OF CONTENTS PREFACE .........
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CHAPTER IV. LEVERAGING FOREIGN INVE
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I.9 Sectoral distribution of cross-
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List of annex tables available on t
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KEY MESSAGES FDI Trends and Prospec
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• Securing IIAs’ contribution t
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OVERVIEW FDI TRENDS AND PROSPECTS G
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of uninterrupted growth. While thei
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loans from Brazilian affiliates abr
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as attractive FDI destinations. Inh
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observed since 1992, when UNCTAD st
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LEVERAGING FOREIGN INVESTMENT FOR A
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• • • • There has been a ra
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opportunities for such investment i
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enefits (e.g. tax revenues and empl
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Partly for this reason, the pendulu
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I GLOBAL TRENDS IN FDI CHAPTER I Gl
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CHAPTER I Global Trends in FDI 3 Fi
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CHAPTER I Global Trends in FDI 5 Be
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CHAPTER I Global Trends in FDI 7 12
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CHAPTER I Global Trends in FDI 9 ac
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CHAPTER I Global Trends in FDI 11 a
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CHAPTER I Global Trends in FDI 13 a
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CHAPTER I Global Trends in FDI 15 c
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CHAPTER I Global Trends in FDI 17 I
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CHAPTER I Global Trends in FDI 19 P
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CHAPTER I Global Trends in FDI 21 $
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CHAPTER I Global Trends in FDI 23 c
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CHAPTER I Global Trends in FDI 25 F
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CHAPTER I Global Trends in FDI 27 1
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REGIONAL TRENDS IN FDI CHAPTER II F
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CHAPTER II Regional Trends in FDI 3
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Page 192 and 193: EPILOGUE 155 (WIR09); international
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REFERENCES 163 National Science Boa
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REFERENCES 165 UNCTAD (2009h). The
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ANNEXES 167 Region/economy ANNEXES
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ANNEXES 169 Annex table 1. FDI flow
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ANNEXES 171 Region/economy FDI infl
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ANNEXES 173 Annex table 2. FDI stoc
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ANNEXES 175 Annex table 2. FDI stoc
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ANNEXES 177 Annex table 3. List of
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Selected UNCTAD publications of TNC
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UN World Investment Report 2010 - Office of Trade Negotiations

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