CSR

UN Global Compact Leaders Summit

This month’s United Nations (UN) Global Compact Leaders Summit has seen executives from major international companies such as Coca-Cola, Fuji Xerox and LM Ericsson adopt the 21-point Geneva Declaration — a set of concrete actions to be taken on human rights, the environment and corruption.

The Declaration — spelling out measures to be taken by business, governments and UN Global Compact participants — states: “Globalisation, if rooted in universal principles, has the power to improve our world fundamentally … The need for action is urgent. Poverty, income inequality, protectionism and the absence of decent work opportunities pose serious threats to world peace and markets … Business, as a key agent of globalisation, can be an enormous force for good”.

Some 4,000 organisations — including some 3,100 businesses — have already signed up to the Global Compact and its 10 universal principles on human rights, labour rights, the environment and the struggle against corruption.

The Summit used three studies to push home the CSR message. A report by investment bank Goldman Sachs found that among the six sectors covered by its research, companies considered leaders in using environmental social and governance policies to create “sustained competitive advantage” have outperformed the general stock market by 25% since August 2005. Furthermore, 72% of these companies outperformed their peers over the same period.

The Compact used the summit to release its first annual review, which monitors the extent to which companies have implemented the 10 Global Compact principles. It found, amongst other things, that: 75% of respondents have engaged in cross-sector partnerships with organisations such as NGOs, academia and the UN; and 63% say they participate in the Compact to increase trust in the company.

However, the third study – a survey prepared by McKinsey & Company – found that while 72% of chief executives participating in the Compact believe CSR should be fully embedded into strategy, only 50% think their companies actually do so. What is more, while 59% said CSR should be embedded into global supply chains, only 27% think they themselves are doing so.

Also unveiled at the summit were the Principles for Responsible Management Education (PRME) – part of a call for business schools and academic associations to play their part in advancing CSR. Manuel Escudero, the Compact’s head of academic initiatives, said: “Globalisation not only needs companies that can decisively contribute to more sustainable and inclusive markets. It also needs a new generation of managers and leaders who are up to that task. The PRME initiative, as a global call, will be followed by an increasing number of academic institutions”.

August 2007