Tuesday, April 10, 2012

United Nations Global Compact Overview

The UN Global Compact is a strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labour, environment and anti-corruption. By doing so, business, as a primary driver of globalization, can help ensure that markets, commerce, technology and finance advance in ways that benefit economies and societies everywhere.

As social, political and economic challenges (and opportunities) — whether occurring at home or in other regions — affect business more than ever before, many companies recognize the need to collaborate and partner with governments, civil society, labour and the United Nations.

This ever-increasing understanding is reflected in the Global Compact's rapid growth. With over 8700 corporate participants and other stakeholders from over 130 countries, it is the largest voluntary corporate responsibility initiative in the world.

Endorsed by chief executives, the Global Compact is a practical framework for the development, implementation, and disclosure of sustainability policies and practices, offering participants a wide spectrum of workstreams, management tools and resources — all designed to help advance sustainable business models and markets. (See How to Participate.)

Overall, the Global Compact pursues two complementary objectives:

Mainstream the ten principles in business activities around the world

Catalyze actions in support of broader UN goals, including the Millennium Development Goals (MDGs)

With these objectives in mind, the Global Compact has shaped an initiative that provides collaborative solutions to the most fundamental challenges facing both business and society. The initiative seeks to combine the best properties of the UN, such as moral authority and convening power, with the private sector’s solution-finding strengths, and the expertise and capacities of a range of key stakeholders.

The Global Compact is global and local; private and public; voluntary yet accountable.

The benefits of engagement include the following:

Adopting an established and globally recognized policy framework for the development, implementation, and disclosure of environmental, social, and governance policies and practices.

Sharing best and emerging practices to advance practical solutions and strategies to common challenges.

Advancing sustainability solutions in partnership with a range of stakeholders, including UN agencies, governments, civil society, labour, and other non-business interests.

Linking business units and subsidiaries across the value chain with the Global Compact's Local Networks around the world — many of these in developing and emerging markets.

Accessing the United Nations' extensive knowledge of and experience with sustainability and development issues.

Utilizing UN Global Compact management tools and resources, and the opportunity to engage in specialized workstreams in the environmental, social and governance realms.

A more detailed analysis of the benefits of participation in the Global Compact can be found in The Importance of Voluntarism — which also focuses on the importance of the Global Compact as a complement rather than substitute for regulatory regimes

Finally, the Global Compact incorporates a transparency and accountability policy known as the Communication on Progress (COP). The annual posting of a COP is an important demonstration of a participant's commitment to the UN Global Compact and its principles. Participating companies are required to follow this policy, as a commitment to transparency and disclosure is critical to the success of the initiative. Failure to communicate will result in a change in participant status and possible expulsion.

In summary, the Global Compact exists to assist the private sector in the management of increasingly complex risks and opportunities in the environmental, social and governance realms, seeking to embed markets and societies with universal principles and values for the benefit of all.

Key Documents

UN Global Compact Brochure
After the Signature – An Introduction to the Global Compact
The Inspirational Guide to Implementing the Global Compact
Global Compact Annual Review – 2010
Global Compact Annual Review – Anniversary Edition
Global Compact Annual Review 2008
Global Compact Annual Review 2007
Letter to Global Compact Stakeholders (2010 – 2011)
The Importance of Voluntarism

Core UN Agencies

Office of the High Commissioner for Human Rights
United Nations Environment Programme
International Labour Organization
United Nations Development Programme
United Nations Industrial Development Organization
United Nations Office on Drugs and Crime
United Nations Entity for Gender Equality and the Empowerment of Women


  1. United Nations Global Compact
    The Ten Principles

    The Global Compact was initially launched with nine Principles. June 24, 2004, during the first Global Compact Leaders Summit, Kofi Annan announced the addition of a tenth principle against corruption in accordance with the United Nations Convention against Corruption adopted in 2003. This step followed an extensive consultation process with all Global Compact participants.

    Human Rights
    Businesses should:
    Principle 1: Support and respect the protection of internationally proclaimed human rights; and
    Principle 2: Make sure that they are not complicit in human rights abuses.

    Labour Standards
    Businesses should uphold:
    Principle 3: the freedom of association and the effective recognition of the right to collective bargaining;
    Principle 4: the elimination of all forms of forced and compulsory labour;
    Principle 5: the effective abolition of child labour; and
    Principle 6: the elimination of discrimination in employment and occupation.

    Businesses should:
    Principle 7: support a precautionary approach to environmental challenges;
    Principle 8: undertake initiatives to promote environmental responsibility; and
    Principle 9: encourage the development and diffusion of environmentally friendly technologies.

    Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.


  2. Our expectations to ensure the quality and impact of these commitments, each must meet the following criteria:

    1. Advance one or more global issues/objective

    2. Include time bound targets that can be measured for success; and

    3. Include an agreement to publicly disclose, on an annual basis, progress made to realize the commitment, throughout its duration.

    Commitments may take various forms, including new projects or partnerships; existing activities that are scaled up or accelerated; adding partners to existing projects; or renewal of ongoing commitments. While businesses can make significant contributions independently, collaboration – whether in a public-private arrangement, with local governments, civil society organizations or the United Nations – is encouraged as it can often lead to greater impact. Commitments that are closely tied to the core business, development plan or mission of a company are also often more durable, sustainable and likely to drive real impact and change.

    Examples of commitments include the following:

    a) Energy & Climate: Reduce emissions from operations or improve the energy efficiency of products and services

    b) Water & Ecosystems: Eliminate wastewater runoff in production or develop water-use regulations in partnership with local governments

    c) Agriculture & Food: Collaborate across a supply chain to build an affordable food distribution system to underserved populations or improve the efficiency of farming operations

    d) Social Development: Expand business relationships with women-owned enterprises, including small businesses and women entrepreneurs.

    e) Urbanization & Cities: Create a high quality, low impact sewer system in a developing market or partner with local governments to create more reliable public transportation options

    f) Economics & Finance of Sustainable Development: Provide financing for an innovative development venture or build an international market for the exchange of development funds.

  3. Conversations with an international network of CEOs, academics and activists that impact the Millennium Development Goals and the Sustainable Development Goals for Africa, the Diaspora and the Earth