July sees the first anniversary of the launch of the United Nations’ Global Compact with companies. Georg Kell, who leads the Compact’s development from the Secretary-General’s office, reflects on the Compact’s genesis, and gives a preview of the first year’s activity report.
The truth is, when we first started talking about universal business principles two-and-a-half years ago, we had no plans to embark on a major initiative. The Global Compact was a call to action to business leaders by UN Secretary-General Kofi Annan, in a speech to the World Economic Forum in Davos in January 1999. It was ten months before the Seattle meeting of the World Trade Organisation, but the fragility of globalisation was already obvious. Social and environmental issues were being stirred into a debate about trade between countries – where negotiators were ill-equipped to respond to them. Poorer countries felt globalisation had not delivered the dream of shared prosperity – billions of people remained extremely poor. Many in both rich and poor countries were questioning a system that stood ready to enforce intellectual property rights, but turned a blind eye to basic human rights, labour rights and the environment. Mr Annan’s speech emphasised that restrictions on trade were not the way to tackle these issues: companies should tackle them directly. He called on them to apply nine principles in the areas of human rights, labour standards and the environment – all areas where the UN had agencies, and where there were international standards agreed by most countries. We thought that if the nine principles of the Global Compact became an integral part of economic activities everywhere, then economic rules and social concerns would be more balanced. With the threat of protectionism reduced, millions of people around the world would have the opportunity to benefit, directly or indirectly, from better conditions.
The response was extraordinary. CEOs and foreign ministers were so enthusiastic that in July 2000, we launched the Compact’s operational phase in New York. Today several hundred companies are participating – from OECD and developing countries – with the common goal of human development in poorer countries.
Are these companies wrapping themselves in the UN flag? Let’s be clear about our role here. We set out to encourage companies to learn and take action. We cannot monitor or assess them in-depth. We provide principles and a framework for action. We provide support and new contacts. We will share experience of what works – and what doesn’t – based on organisations we believe to be sincerely committed to change. We judge this by the actions they take. So we do not publish their names until they demonstrate how they are putting at least one of the nine principles into practice. Year after year.
Some companies are changing the way they do business – to maximise the positive spin-offs for local suppliers in the value chain, for example. Others are investing in partnership development projects – tackling issues such as education or micro-credit.
All will share their experience through an online learning forum, live from October, with commentaries from Warwick Business School.
The first of our annual policy dialogues in March on the role of business in conflict zones, has already led to practical projects. Next year’s will cover sustainability, ready for Earth Summit II in South Africa.
By the end of this year we will have completed a roadshow to raise awareness of the Compact in every region of the world, making the Compact truly local, as well as global. If you’re not already involved, do consider it, and look out for our first report in mid July – it will be posted on our website at http://www.unglobalcompact.org, where we’ll also launch a regular update on wider CSR news from around the world.
Georg Kell joined the UN in 1987, with a background in economics and engineering. He started as
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