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Lead Essay

Published on: March 29, 2022, 4:05 p.m.
The global compact

By Shabnam Siddiqui and Arya Dev. The author is Executive Director, UN GCNI; Dev is Programme Analyst (Legal), CEGET – UN GCNI

From inception, the UN has been a creator and facilitator of innovative ideas in geopolitical economy. The quality and diversity of its intellectual leadership and its value-based framework for dealing with the global challenges of our times has always embodied a vision of international co-operation among governments and people to build a more peaceful and prosperous world for all.

The UN Global Compact (UNGC) is a voluntary initiative intended for businesses to answer that call. Kofi Annan, the late UN Secretary-General, addressing the Davos World Economic Forum in January 1999, challenged business leaders to join a ‘global compact of shared values and principles’ and ‘to give globalisation a human face’. Annan argued that shared values provide a stable environment for the global economy and encourage good corporate practices, which are meant to tackle the challenges brought on by globalisation. 

Following the 1999 meeting, Annan and a group of business leaders formulated nine principles, which have come to be known as the UN Global Compact. After a lengthy consultation, the 10th principle against corruption was added in June 2004. The 10 principles of the Global Compact focus on human rights, labour, environment, and anti-corruption and are derived directly from commitments of international covenants – the Universal Declaration of Human Rights; the International Labour Organisation’s Declaration on Fundamental Principles & Rights at Work; the Rio Declaration on Environment & Development; and the United Nations Convention against Corruption. 

 Origins and growth

The mission of the UNGC is to foster a more inclusive and sustainable relationship between business and societies. Businesses can pursue it through internalising UNGC and its principles in their business strategies and operation. UNGC aspires to facilitate cooperation and collective problem-solving between different stakeholders. It seeks to provide a universal language for corporate responsibility and an authoritative framework for businesses everywhere, regardless of size, complexity or location. 

UNGC has nurtured a network-based approach for the facilitation of multi-stakeholder CSR initiatives. The Local Networks advance the implementation of the 10 principles and catalyse business engagement on the broader goals of UN, including Sustainable Development Goals (SDGs) at the national level. They facilitate outreach, learning, policy dialogue, collective action, and partnerships. The networks scale action locally, helping to unite companies with communities and authorities to work together and address pressing issues. As countries differ widely with regard to their legislation around different aspects of responsible management, as well as their knowledge about and experience with relevant corporate practices, local networks help to contextualise discussions among business and non-business actors.

The engagement mechanism used for participants includes:

• leadership, in which the change is initiated by CEO commitment to the principles; 

• dialogue, including a multi-stakeholder approach to identify challenges and find solutions; 

• learning, by reinforcing dialogues through examples, case-studies and best-practices; and 

• outreach, by providing frameworks at the national, regional and sectoral levels.

Over the years, UNGC’s vision, which was supported by 44 pioneering companies, has today grown to become the world’s largest sustainable business initiative. With 69 local networks, more than 10,000 businesses headquartered in 160 countries, representing more than 70 million employees worldwide, UNGC has become a global movement of businesses and stakeholders united to create the world we want.

SDG: a key priority

UNGC has worked towards change through thought leadership, scaling best practice and action globally and creating an enabling environment for sustainable change. Along with a set of Principles for Responsible Investment (PRI), which has more than 2,300 signatories, as well as a body of Principles for Responsible Management Education (PRME) designed to equip tomorrow’s responsible business leaders with sustainability acumen and awareness, UNGC is guided by 17 SDGs and the Paris Climate Agreement. The SDGs reflect the UN’s agenda for sustainable development until the year 2030.

SDGs are better aligned with responsible management concerns due to their more explicit emphasis on partnerships and their recognition that social, environmental, and economic problems are interconnected.While it is true that goal frameworks like the Millennium Development Goals (MDGs) provide organisations at national level with a monitoring framework, which helps them to put pressure on governments and hold them to account; with the advent of SDGs, this process has been more inclusive than ever, with governments involving business, civil society, and citizens from the outset. UNGC is committed to be a leading catalyst of that transformation. 

Much like the UNGC’s 10 principles, the SDGs provide a common framework to set priorities vis-à-vis sustainable development and to align the expectations and strategies of different stakeholders. Commitment to the SDGs is very much framed around the ‘business case’ for responsible management. The ‘Agenda 2030’ is as much an agenda for sustainable development as it is an agenda for responsible management learning. Such learning can happen in explicit and implicit ways, and conscientiously so, if we learn about sustainability, responsibility, and ethics against the background of the SDGs.

The pandemic presents both an enormous challenge and tremendous opportunities for reaching the 2030 Agenda. It has exposed the global fragilities and laid bare the rampant inequalities that were already making life difficult for the most vulnerable. But the pandemic also shows us the wisdom of what is already inherent in the SDGs; the challenges we face cannot be dealt with in isolation. It demonstrated that the human community is completely interconnected and interdependent, that without harmony, especially with those most vulnerable among us, we all lose.

It is widely accepted that the scale and pace of change to deliver the SDGs has not been large enough or fast enough to date. At this point in time – with 10 years to go – the world is not on track to achieve the SDGs. We need a ‘Decade of Action’ to reverse this predicament. For businesses, now more than ever, it is time to ramp-up action in all areas of their operations and value chains to support the delivery of the SDGs.

To build back stronger from the Covid-19 pandemic, UNGC launched a three-year strategy (2021-23) to increase businesses’ contributions to the SDGs. The strategic ambition is to accelerate and scale the global collective impact of business by upholding the 10 principles and delivering the SDGs through five key shifts to accelerate the actions of business: holding companies accountable, balanced growth of local and regional networks, harnessing the collective action of small and medium-sized businesses, measuring impact in priority areas and engaging more actively with the UN and its partners.

Raising the bar

The UNGC works closely with its local networks to build their capacity to connect the local business community with UN offices at the country level. While local networks are independent, self-governed, and self-managed entities, they work closely with the UNGC Office in New York and act as a point of contact for UNGC signatories in a country.

In January 2018, the UNGC launched a new governance model called ‘One Global Compact’. The new ‘One Global Compact’ governance, which provides for more alignment and integration between the UNGC and 69 local networks, gives greater substance to the G-local approach of the initiative. It is a global movement with strong connections at local level in order to be present where companies operate, guiding them to act responsibly and in an innovative way towards reaching sustainability.

UN Global Compact Network India

Formed in November 2000, UNGCNI was registered in 2003 as a non-profit society to function as the Indian local network of the Global Compact, New York. It is the first local network in the world to be established with full legal recognition. Apart from programmatic interventions, principle-based projects and flagship events, it carries out training and research, thematic competitions and has a knowledge center which boasts of publications on various facets of sustainability and responsible business practices.

Currently, UNGCNI is already running five major initiatives that include Global Impact Initiatives (GIIs), UNGC business accelerator programmes designed to mainstream proven and established sustainable business practices – target gender equality (TGE); SDG ambition; young SDG innovators; climate ambition for 1.5 degree future; and CEO water mandate. These initiatives are focussed on not only measuring actionable impact and progress by companies that are members of the UNGC, but also by shining a spotlight on individuals delivering impact. GCNI is also supporting the creation and expansion of India chapter of PRME.

Consistent with UNGC’s decentralised governance framework, which is crucial to the adaptation of the principles of the compact at the local level, UNGCNI has also provided for robust and decentralised system of governance, whereby it facilitates the launch and operation of local chapters in key Indian cities. UNGCNI has its local chapters in eight major Indian cities/states – Mumbai, Hyderabad, Chennai, Kolkata, Bengaluru, Pune, Assam and Kerala.

Throughout our journey, we have facilitated consultations across businesses, both public and private sector, and non-business stakeholders such as academia, policy makers and civil society. We believe that partnership and collective action is essential in all activities to advance the SDGs in the future.

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