The Business of Ethics: The United Nations Global Compact Has a Critical Role to Play in Ensuring That Companies Pay More Than Lip Service to the Corporate Responsibility Agenda

By Barman, Tanya | Financial Management (UK), March 2011 | Go to article overview

The Business of Ethics: The United Nations Global Compact Has a Critical Role to Play in Ensuring That Companies Pay More Than Lip Service to the Corporate Responsibility Agenda


Barman, Tanya, Financial Management (UK)


It has been ten years since Kofi Annan, the former United Nations secretary-general, assembled leaders from business, society and government to develop ethical guidelines that companies wanting to be a force for good in the world could agree to live by.

This meeting culminated in the ten principles that form the basis of the United Nations Global Compact (UNGC). The principles - designed to uphold human rights, ensure good labour relations, protect the environment and fight corruption - have been promoted through collective action and have become increasingly embedded in mainstream business practice over the past decade. It's estimated that 7,700 participating companies, of all sizes and from more than 130 countries, have signed up to the UNGC, making it the world's largest voluntary corporate citizenship initiative.

As a leadership platform, the UNGC must be endorsed at board level. There is also a strong drive to ensure accountability and continuous improvement. Once a company has signed up, it is obliged to submit an annual "communication on progress" disclosure explaining how its activities align with the ten principles. Although the network is global, it operates through smaller national networks, bringing signatories together at a local level. CIMA is a participant in the UK network, currently chaired by Andrew Cave, head of sustainability at the Royal Bank of Scotland Group (RBS).

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For RBS, membership of the UK forum provides a chance to interact with other UK banks and share knowledge, practice and architecture. A recent initiative, supported by the government, was the pooling of knowledge about the contribution made by UK firms towards the achievement of the UN's eight millennium development goals. This resulted in a report that was presented at the UNGC leaders' summit last June.

One of the contributing companies was Reed Elsevier, a publisher specialising in scientific and medical research reports. The firm has provided access to critical information that can be used to tackle systemic problems. For example, it has highlighted issues concerning maternal health - one of the millennium development goals - and ensures that leading medical research is available to countries that need it most.

Reed Elsevier's involvement with the UNGC provides a valuable means of building contacts and sharing expertise with a global network of leaders from business and civil society, according to Marcia Balisciano, the firm's director of corporate responsibility. The UNGC principles critically informed the company's development of policies and codes - particularly its ethical code - which applies across the group.

Balisciano's colleagues are engaged in different areas of the UNGC's activities. For example, they sit on a steering group covering supply-chain issues, as well as the current "CEO water mandate" initiative, which focuses on the problems of water scarcity and poor sanitation. One of her firm's divisions, LexisNexis, which provides information and technology relating to the rule of law, is working with the UNGC to produce videos that raise awareness about relevant issues among lawyers.

For small and medium-sized companies, participation in the network activity of the UNGC around the world can be particularly valuable, as they may not have the resources or knowledge to get to grips with sustainability goals and align them with their business goals. The RBS's Cave says that the UNGC provides ten understandable principles and an accessible framework that can easily be translated into practice. This provides a good starter for organisations that wish to strengthen this aspect of their business as sustainability issues rise up the strategic agenda.

Last June the UNGC and consultancy firm Accenture published a comprehensive research report based on the views of global chief executives. Of those surveyed, 93 per cent stated that sustainability "will be critical to the future of their companies". …

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