UN Global Compact – Toothless Initiative or Catalyst for Corporate Responsibility?
The United Nations Global Compact (UNGC), an initiative launched by Kofi Annan in 2000, attracted the attention of many skeptics, including myself. A voluntary set of principles, loosely encompassing human and labour rights, environmental responsibility, and later, anti-corruption that companies could sign on to at the drop of a hat (or, in this case, a brief letter of intent to the UN Secretary-General). Cynics called it an exercise in PR, critics called it toothless since there was no enforcement mechanism, and some NGOs denounced the initiative as a ‘corporatisation’ of the UN. Then, in 2003, the UNGC introduced mandatory reporting for members requiring disclosure of their efforts to implement the ten principles. Still, I was not convinced. I had read some of the ‘Communications on Progress’ (CoP) as they are called, and apart from the larger companies that were already producing sustainability reports, these CoPs did not seem to delve very deeply into the company’s social and environmental impacts. Furthermore, the vague language in the principles appeared to set a very low standard for performance.
However, at the beginning of 2005, I was recruited to help CSCC draft their Communication on Progress as they had been a member for almost two years and were due to report in the summer of ’05. I was interested in the work that CSCC was doing so I decided to apply for the position. I quickly realised that the undertaking was no walk in the park. Not only did it require a gap analysis of all of our policies and procedures related to the corporate responsibility, it also required significant energies in collecting and analysing data (even for our relatively small company) to assess our current levels of performance in the ten areas. We set up a CSR Committee to oversee the work and I regularly reported to senior management on our progress (from why we were doing it to our data needs, to our dissemination strategy) over the course of the project.
Our ten-page CoP took six months from conception to publication and continues to impact the way we do business today. I saw first-hand the process of public disclosure as a driving force for transparency, change, and improvements in all our operations from living our values to delighting our clients. Our second report is due to be published by the end of the year.
Today, the UN Global Compact has almost 3,000 member companies representing the largest voluntary corporate responsibility initiative in the world. And what strikes me the most is that, unlike most CR initiatives, the Compact consists of a broad membership base that includes almost fifty per cent developing country members. In addition, almost half of the companies are small and medium-sized enterprises. Yes, the principles are broad and the standards for performance and reporting are low, but as a learning forum and an inclusive network for sharing best practices and driving continual improvements, there are few initiatives that can boast a similar scope.
To view our 2005 CoP, follow this link: www.cscc-online.com/cscc_ungc_cop.pdf
To look up member companies and their CoPs by country, company, sector, or size, see: www.unglobalcompact.org/ParticipantsAndStakeholders/search_participant.html
