Responding to Jon Entine’s November column, Global Compact executive director Georg Kell argues that the organisation is on the right track
Responding to Jon Entine’s November column, Global Compact executive director Georg Kell argues that the organisation is on the right trackThroughout the years, the UN Global Compact has met its fair share of critics. And to be fair, their positions have contributed much to the initiative’s evolution.
Ever so often, however, we are confronted with more indiscriminate broadsides, such as Jon Entine’s column – UN Global Compact: Ten years of greenwashing? – published in the November issue of this magazine.
In our view, Mr Entine’s contribution brings to mind the words of the late Senator Daniel Patrick Moynihan: “Everyone is entitled to his own opinion, but not to his own facts.” Let’s set the record straight.
First off, it is not one of the “key requirements” of participation to “pony up dues”, as Mr Entine writes. In fact, no business can (or must) buy their way into the Global Compact. While we strongly encourage companies to support the Foundation for the Global Compact – and thus our work – a large number of participants have never contributed, and we do not penalise those that don’t.
Of course, there are good reasons to keep the entry barrier low. The Compact has never aimed to be an elite club of sustainability leaders, but an inclusive platform, also welcoming those that face serious problems – as long as they demonstrate a sincere commitment to dialogue and learning. That was the reason we publicly challenged BP to engage more strongly following the oil spill in the Gulf of Mexico.
Engagement
Likewise, we feel that engagement was the right path when the China National Petroleum Corporation (CNPC) joined 80 other businesses, investors and NGOs for a dialogue on responsible business in conflict-affected areas, particularly Sudan – even though CNPC is not a Global Compact participant (while its domestic subsidiary PetroChina is).
The often complex and difficult discussions – not exactly what Mr Entine describes as giving the company a “gold star” – resulted in concrete guidance that provided many companies and their shareholders with a common reference for more constructive engagement in conflict zones.
In sum, we never claimed that participation in the Global Compact “is accomplishment enough”. Instead, a commitment to the ten principles articulates an aspiration to improve environmental and social performance, to be more transparent and to engage in partnership.
Of course, no one argues that the Global Compact is without flaws. Projects of this scale naturally mature through trial and error.
A good example is our own reporting policy, also known as the Communication on Progress (COP). What began as a vaguely defined voluntary effort to share examples of good practice has become the Compact’s central transparency mechanism.
But far from mandating “an extraordinarily low level of disclosure”, as Mr Entine writes, we recognise that companies of different sectors or sizes find themselves at very different stages of performance. What we offer is a manageable entry point to disclosure, with a trajectory towards more comprehensive and material reporting by advanced performers.
The COP policy is strictly enforced and nearly 2,000 companies have been expelled for repeated failure to disclose performance information.
What some critics tend to overlook are the Compact’s softer, but no less tangible impacts over the years.
For instance, in the turbulent days of anti-globalisation protests and corporate scandals that marked the turn of the millennium, there wasn’t much appetite for constructive dialogue, especially not between business and civil society. Using the UN’s good offices, the Compact has done much to move these seemingly irreconcilable parties closer together, often resulting in productive collaborations that last to this day.
Likewise, we have early on stressed the materiality of environmental, social and governance (ESG) issues to the financial markets. With the launch of the Principles for Responsible Investment (PRI) in 2006, the Global Compact created a platform for hundreds of investors and asset managers to engage companies on critical challenges and drive positive change.
Behavioural change
And realising that lasting organisational change requires behavioural change, we introduced the Principles for Responsible Management Education (PRME), a global effort to ensure that corporate sustainability is deeply embedded in the education and training of future business leaders. The PRME are now supported by more than 300 business schools and other institutions of management education worldwide.
Most importantly perhaps, the Global Compact has helped spread the idea of corporate responsibility around the world. At the close of the Compact’s first decade, our participants engage in more than 90 local networks, and have mobilised a vast number of business partnerships to reduce poverty, address environmental challenges or fight corruption.
Of course, our mission is far from accomplished. But noting that morality and materiality in business are increasingly understood as two sides of the same coin, we feel we must have been doing something right.