As business enthusiasm wanes, the UN Global Compact unveils new investment opportunities. Will it be enough to attract more participation?
In collaboration with some 1,000 business allies, the UN today issued an updated “architecture” aimed at intensifying companies’ role in advancing economic development, improving human health and reversing environmental degradation.
At the UN Global Compact Leaders Summit in New York City, Secretary General Ban Ki-moon emphasized the growing need for private companies to coordinate their market efforts with UN’s long-standing development goals.
The business engagement architecture is designed to “drive and scale up corporate actions to directly advance United Nations goals,” Ban said.
The blueprint, Building the Post-2015 Business Engagement Architecture, marks a high point in the UN’s ambitions to engage with business. When it was launched in 2000, Ban said, “there was no clear agenda for business”.
Today, the GC is the world’s largest voluntary organization of its kind, comprising 8,000 companies and 4,000 civil society organizations from 145 countries.
“For the first time in the history of United Nations, UN goals, sustainability development priorities, are directly linked to long term corporate goals,” said Georg Kell, executive director of the Global Compact. “This is a genuine innovation and brings a strategic level of collaboration to the effort. We offer, for the first time, a comprehensive and integrated menu of opportunities for engagement.”
The architecture that the UN released today, in collaboration with the World Business Council for Sustainable Development and the Global Reporting Initiative, formalizes three broad new programmes focused on education, agriculture and peace.
The new Business for Peace platform, for instance, aims to help companies invest in conflict-affected and high-risk areas. Long-term job creation, economic growth and infrastructure restoration are vital to nurturing peace in often-fragile conditions of post-conflict regions, said Sir Mark Moody-Stuart, vice chair of the UN Global Compact board.
These three new programmes join an existing pool of efforts focused on women’s empowerment, children’s rights, climate, water and anti-corruption.
The new plan – 13 years after the GC’s founding – comes as the clock runs down toward the 2015 deadline to achieve the Millennium Goals.
Enthusiasm seems to be ebbing. A CEO survey released by Accenture during the conference found that most companies aren’t integrating social, environmental and governance issues into their core strategies. (Download a copy of the report here or get more information from Accenture here.)
The poll of more than 1,000 global executives found that 45% of CEOs believe that sustainability will be “very important” to the future success of their business, a decline of nine percentage points from a similar study in 2010.
As GSB’s Jo Confino pointed out in his assessment of this study, these findings bookend a pair of two earlier studies (from the UNGC and CDP, formerly the Carbon Disclosure Project), that find progress slowing – or even backsliding – in corporate efforts.
US players missing
North American companies, which make up roughly a third of Fortune’s list of the 500 largest global companies, comprise only 18% of Accenture’s respondents.
With their high visibility and deep resources, more US players would help. Yet US companies have been somewhat hamstrung by concerns over legal liability if they commit to the compact’s 10 principles.
The UNGC is working to help legal counsels separate and neutralize these perceived risks from conventional contractual liabilities and open the door for more US entrants, Kell told me in a Q&A following the launch.
“We want to grow from 8,000 to 20,000 hopefully by 2016, but we can grow only with quality,” said Kell, who last year took steps to prod and shed inactive GC members.
Finding the right balance – and meeting the goals – is critical, said John Ruggie, Berthold Beitz Professor in Human Rights and International Affairs at Harvard Kennedy School, during the launch:
Look around you and you will already see signs of some of the consequences. They take the form of resource nationalism, increased protectionism, sectarian violence, extreme populism on the left and right, xenophobia, homophobia and generally rolling back globalization out of fear of the other and by anger at fear of being left behind. That would not auger well for people planet or profits…. The stakes are high, the time is short, the cost of getting it wrong is incalculable and the opportunities to getting it right are legion.
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