In mid-June, around 1.500 senior executives from all over the world should have been in New York's United Nations headquarters. Because the host United Nations Global Compact celebrated its 20th anniversary. So long has the self-defined definition of "world's largest initiative for sustainable business" been in place. However, like so many events this year, the physical summit fell victim to the Corona pandemic.
The “Leaders' Summit” took place virtually, however, and quite concentrated: On June 15 and 16, a total of 26 hours of plenary sessions, breakout sessions and networking chats were streamed live around the world. Presidents and ministers discussed top pandemics, climate change and sustainability with top managers and UN representatives.
Do business with principles
The Global Compact was a project close to the heart of the then, now deceased UN Secretary General Kofi Annan. "As long as globalization does not work for everyone, it will not work for anyone," he said in a speech at the World Economic Forum in Davos in 1999 and called on company representatives to work towards an inclusive, resource-efficient and sustainable world economy. A year and a half later, on July 26, 2000, the new pact between companies and the United Nations was launched. Universal principles on human rights, labor standards, environmental protection and the fight against corruption were agreed as a common foundation (see below).
Anyone who joins the Global Compact undertakes to adhere to these ten principles. Later on, the promotion of the 2030 Agenda for Sustainable Development became part of the agreement. With the help of the 17 Sustainable Development Goals SDG, companies should make their contribution so that hunger and extreme poverty are eliminated by 2030, and gender equality, climate protection and the preservation of ecosystems are achieved.
10 principles for a better world
Principle 1: Companies should support and respect the protection of international human rights within their sphere of influence and
Principle 2: Make sure they are not complicit in human rights violations.
Principle 3: Businesses should uphold freedom of association and effective recognition of the right to collective bargaining, as well as for
Principle 4: the elimination of all forms of forced labor,
Principle 5: the abolition of child labor and
Principle 6: the elimination of discrimination in employment and employment.
Principle 7: Companies should support a precautionary approach when dealing with environmental problems,
Principle 8: Take initiatives to increase environmental responsibility, and
Principle 9: promote the development and diffusion of environmentally friendly technologies.
Principle 10: Businesses should work against all forms of corruption, including extortion and bribery.
Declarations of membership from around the world arrive weekly on Third Avenue in the heart of New York. The member database currently comprises around 11.000 companies. The youngest include the German Schwarz Group and its Lidl and Kaufland trading divisions with 430.000 employees. And with Real Madrid, the first football club has also been involved since May.
Overall, the Global Compact is pretty colorful: 3.500 NGOs, academic institutions, associations and cities such as São Paulo and Dubrovnik have also signed. As well as any organization is welcome. A firm “no-go” applies only to companies that are subject to UN sanctions, sell arms or are active in the tobacco industry. With participants in 161 countries from Afghanistan to Cyprus, the Global Compact has actually grown into a global initiative, and local networks also exist in 68 countries. The Austrian branch, which is part of the respACT corporate platform in Vienna, will celebrate its 2021th birthday in 15. The first domestic members were OMV and Wienerberger, currently counting the network in Austria around 125 participating organizations.
The Global Compact is designed as an open forum through which the participating organizations can "exchange experiences, develop ideas and launch partnerships". "We see ourselves as an innovation incubator who wants to promote sustainable development," says Stefanie Less from the Austrian network.
Since 2015, when the United Nations passed the 17 Sustainable Development Goals, the Global Compact has been trying to convince companies to implement them. It is important to “identify opportunities where business overlaps with the 2030 Agenda, so that new solutions are created that move us forward,” says former Global Compact CEO Lise Kingo. Together with local networks, Kingo initiated campaigns such as "Making Global Goals Local Business" to raise awareness that this is a real management issue. In addition, a number of guidelines and action platforms have been launched to help companies.
And it's always about role models: companies or individuals who are particularly committed are brought up to the curtain. The Global Compact selects so-called lead companies, which make progress through innovative approaches in areas such as water and climate protection, anti-corruption or equality between men and women. The currently 36 leading companies include Bayer, the China Development Bank, L'Oreal and Unilever. People who drive SDG implementation in their companies are recognized as SDG pioneers or promoted as young SDG innovators in a ten-month program.
However, the Global Compact is not one thing: a certifiable standard for responsible corporate management. Nor does it condemn member companies that violate the principles. You see yourself more as a leader than a guard dog, it says from the headquarters. Not everyone can benefit from this positive approach. The pact has been accused of toothlessness and non-commitment since its beginnings. Criticism of this kind has not yet been completely ignored. "Unfortunately, it is doubtful whether the Global Compact will change the behavior of companies or whether it will only offer companies a platform for insufficient promises," said Nathalie Rengifo from the NGO Corporate Accountability. Above all, she locates a PR initiative that allows blue washing - a term that critics use in reference to the blue logo of the UN. Rengifo wishes the Global Compact "to exclude companies when a violation of the principles is evident and to support efforts to actually hold companies responsible."
Report and pay
In fact, the Global Compact continuously removes participants from its database - but not the bad ones, but the silent ones. Because companies have to publish their progress in implementing the ten principles once a year. If you do not submit a Communication on Progress COP, you risk downgrading the participant status from active to "not communicating." And those who are in default for two years risk being kicked out. According to the Global Compact database, this has affected 13.000 participants to date.
The effort for such a COP is manageable in practice. “Today, large companies usually produce sustainability reports anyway, which are accepted as adjustments as COP. And smaller participants are allowed to submit short reports, ”explains Less. The Global Compact is currently working on a new reporting mode that has been announced for 2021. "This will increase transparency and make progress in the area of the SDG easier to present," says Less, and: "Companies should then be able to derive greater added value from reporting."
It is only since 2018 that members have had to pay contributions to the Global Compact Foundation, which forwards 40 percent to the respective local networks and invests five percent in the establishment of new hubs, for example in developing countries. For companies, contributions are between $ 1.250 and $ 20.000 a year depending on sales. You can choose between two offers: the basic version as a signatory or the twice as expensive premium version as a participant. While all members have access to learning and dialogue formats as well as the events of the local networks, participants can also take advantage of all international offers such as further training and coaching through the UNGC Academy or exclusive conferences.
Symbol to the outside
In Austria, more than 20 companies have signed up to the pact this year. New are for example Cleen Energy, a Lower Austrian start-up around renewable energy and energy efficiency with 23 employees as well Egger wood-based materials from Tyrol with 9.600 employees and plants from Argentina to Russia. Both companies do not have to be introduced to the topic of sustainability. Above all, joining the Global Compact is a signal to the outside world.
“Standards like those of the Global Reporting Initiative are not easy to grasp for all stakeholders. The ten principles are catchy and offer a comprehensible framework for aligning economic activity with social and ecological well-being, ”says Moritz Bühner, Sustainability Manager at Egger. Membership also serves for further training and exchange. And for Cleen Energy boss Lukas Scherzenlehner, joining was "a logical step" simply because of the field of activity of his start-up. He would like to "actively contribute to sustainable financial issues in particular" and is looking forward to like-minded people, exciting events and "a network that can achieve more together."
How much the network actually achieves is difficult to estimate. Because even if many companies have sustainability strategies, guidelines and codes of conduct, this is no guarantee of a measurable impact, even Lise Kingo regrets. In any case, the current progress report of the Global Compact shows that although today more than 90 percent of the members have adopted the ten principles in their strategies, many do not take any concrete measures to implement them. And only 46 percent of the members state that they will integrate the SDG into their core business.
Harvard professor Mark Kramer also comes to a rather sobering result in a study published last year: "The commitment of almost all of the companies we examined seems to be purely cosmetic: initiatives for corporate social responsibility simply became analogous to the corresponding goals renamed. We found very few companies doing something new or different to advance the SDG. ”
A graduation of the engagement is also evident in Austria, says Less: “There are companies that really work with the SDG and integrate them into their core business. Then there are some who are seriously concerned with sustainability, but do not depend on the SDG in terms of communication. And there are those who do what they have always done and then assign these activities to the SDG. ”It is therefore important, less than ever, to emphasize that a strategic discussion of sustainability is worthwhile for companies : “We believe that companies with a focus on sustainable development are better off coming out of crises. They are more innovative, develop new business models and products and thus increase competitiveness and resilience. "
At the beginning of the year, the Global Compact declared the decade of action and called on companies to be more ambitious. In the meantime, the corona pandemic has turned the global economy upside down, with unforeseeable long-term effects. Some fear that many positive approaches will be destroyed. Because while poverty is increasing again in many countries, commitment to climate protection could decrease. Others are hoping for a global restart and sustainable economic recovery after the crisis. The Global Compact already has the right slogan for it: “Recover better.” And at the virtual conference, ten new ambitious, transformative goals were presented that companies should now tackle.
The Global Compact is therefore not lacking in ambitions and appeals. In mid-June, Lise Kingo passed on the task of carrying this out into the world. Kenyan manager Sanda Ojiambo is now the chief motivator for sustainable business. One thing seems certain: your area of responsibility has a long-term perspective.