May 24, 2015
11.23.2010 - 08:57PM
Research, Reports & Publications
By CSRwire Contributing Writer Elaine Cohen
The UN Global Compact has grown from strength to strength during the past 10 years since its founding by the legendary Kofi Annan. There are some who say it's a weak and ineffective organization. Others say differently.
In 2010, the United Nations Global Compact (UNGC) celebrates 10 years of activity with the publication of a mammoth International Yearbook with 191 pages, listing milestones, achievements, global issues of the time and best practices of 45 UNGC business participants, who also pay for its production. The Yearbook opens with an array of congratulatory messages from the global 'who's who' of political and NGO leaders, all of whom concur the Global Compact has played a crucial role in advancing responsible business practices. In 2000, when a handful of companies and NGOs got together at the invitation of Kofi Annan, corporate social responsibility (CSR) "was a fairly disentangled phenomenon," writes Prof. Andreas Rasche in the Yearbook. "Through its 10 universal principles, the Global Compact structured the debate without being overly regulative and thereby destroying the possibility for innovation." The 10 principles act as a "moral compass," especially for SMEs, which "play a pivotal role when thinking about how to implement corporate responsibility practices in the local context."
There is no doubt the UNGC, a network-based initiative with six UN agencies at its core, has succeeded in amassing a long line of supporters from business, government and non-profit sectors. As of October 2010, total participants numbered 8,596 of which 6,214 are businesses, all of whom have pledged to apply the 10 principles and spread the word. 9,519 Communications on Progress (COPs) have been logged with the UNGC, albeit a relatively low number considering the requirement for each participant to report annually. Although 1,693 participants have been delisted for not communicating, many participants still fail to take this commitment seriously.
The Global Compact appears to be everything and nothing all at the same time. Its loose framework, open to all, welcomes companies who are attracted by the aura of respectability that the UN confers upon those who participate, requiring only a signed commitment from a CEO and the promise to communicate. In this sense, it's an easy ride. Signing off on a short note to the Secretary General is no big deal. Uploading an annual Sustainability Report to the UNGC website is hardly a major effort. For those companies that produce a dedicated COP, a little more thought may be required, but the framework is so non-prescriptive that for many companies, this remains at a highly declarative level. Whether this process has contributed to driving sustainability is the subject of debate and even controversy. Many of the criticisms are leveled at inclusion of those companies who are considered sustainable "baddies" seeking refuge from reputational attacks behind the protective shield of UN legitimacy.
However, in today's transparent world, "baddies" have nowhere to hide. Even the UNGC cannot protect them. Perhaps, then, there is another motive that drives the ever-growing participation in this initiative.
It is possible, in addition to a perception of legitimacy, the more tangible value of the UNGC lies in its unique blend of top-down globalism and bottom-up localism. The inspiration of the global leaders, over 1,000 of whom attended the 2010 anniversary summit held in the USA, June 2010, cascades down to the UNGC Local Networks - which are present in over 92 countries, creating multi-company local collaborator groups in pursuit of common goals transcending individual interest. This may well be the glue holding this global grouping together. They interact, learn, share stories and progress joint projects.
The UNGC 2010 Annual Review states, "In 2009, more than half of Global Compact companies reported that they engage in a GCLN [Local network], citing networking with other companies and assistance with implementation of Global Compact principles as the top reasons for local participation." Seventy-two percent of companies surveyed by UNGC confirm networking to be their prime motivation. This provides local companies with a safe framework for engagement that is directly relevant to their local operations and stakeholders. Equally, the UNGC COP enables an elementary kind of reporting - which is probably about as much as most small businesses can manage to produce, given the GRI framework is rather daunting and has low appeal for SMEs.
Giving the UNGC the benefit of the doubt, we can equally assume those who participate do so from a desire to achieve continuous sustainability performance improvement rather than just flaunt their membership of the world's largest sustainability club. If this is the case, how does the Global Compact measure success? To what extent can sustainability progress made in the last 10 years be attributed to UNGC? If awareness is the measure, UNGC has made a definite impact. If debate is the measure, UNGC is a champion. If sustainability is the measure, UNGC will find difficulty in staking a sole claim to major areas of progress.
Georg Kell, Executive Director of the UNGC since its launch in 2000, sees the second decade of this platform as a new era of sustainability, moving from raising awareness and stimulating positive organizational change to "turning principles into practice and mobilizing tangible action." Exactly what mechanisms the UNGC plans to leverage to mobilize this action is not quite clear. It would be useful, though, for the Global Compact to address this question so when it celebrates reaching the grand age of 20, we will not be asking the same question -- 20 years of what?
About Elaine Cohen
Elaine Cohen is a Sustainability Consultant and Reporter at Beyond Business and blogger on sustainability reporting and author of CSR for HR: A necessary business partnership to advance responsible business practices.
This commentary is written by a valued member of the CSRwire contributing writers' community and expresses this author's views alone.
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