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The Great Twitter Debate: The UN Global Compact – Part 1

October 29, 2009

If Hollywood is to be believed, the world is coming to an end in a little over two years. The soon-to-be-released movie 2012 claims that when the Mayan calendar ends, so will everything we hold dear.  So much for CSR and sustainability.

The good news? Well, first the Mayans have reminded all of us that Hollywood is wrong (phew!). Second, we can say that Twitter has brought the world closer prior to the end of the world.

It all started a few days ago when I participated in a series of Tweets about the United Nations Global Compact. In the discussion, I felt that there was too much disagreement and too many interesting points of views to limit the “debate” to 140 characters.  So I created a page in Google Docs, sent the link out, and invited people to participate and with the sage advice of one participant ( @ElaineCohen ) we opened up the debate to the entire Twitter community.

Before we get to the debate, let’s first review some background information on the UN Global Compact (UNGC). The Compact has 10 “universally accepted principles” on human rights, labor, the environmental, and anti-corruption.   Companies who are members agree to abide by these principles and additionally report on how they have operationalized the principles through an annual “Communication on Progress (COP).” To become a member, companies must simply declare their intention to support the UNGC through a statement from the CEO.

The UNGC is many things to many people. Some view the Compact at a great initial way for companies to start their sustainability effort. Others view the Compact as being pretty words with no teeth and subsequently an opportunity for companies to “bluewash” by wrapping their brand in the reputation of the United Nations.

Thus, our debate. I’d like to thank everyone for participating, for taking the time, and for putting so much thought into their responses. If you’re interested in CSR & sustainability, I recommend following them on all on Twitter. Here are the people who participated:

@ElaineCohen

@Britesprite

@UNGCCritics

@MBernhart

@JEpsteinReeves

This is a long debate with a lot of information, so I’m going to split up the post in two.

JAMES (@JEPSTEINREEVES) : Elaine, as you know we recently got into a discussion on Twitter about the United Nations Global Compact. What’s your take on the UNGC?

Elaine (@ELAINECOHEN): Well, what an interesting way to have a conversation! Thanks James for setting it up.

I believe the UNGC is a very important framework and tool in the development of CSR in a business. The simple framework of 10 principles, and the requirement to report what you are doing in support of these principles is a good formula. It says to businesses: commit to 10 broad principles which are universally accepted. Then tell us how well you are doing. The UNGC framework is not overly prescriptive and gives companies a wide berth in how much, or how little they want to adopt. But it establishes two very important practices: a public declaration in favour of the essential principles of responsible business and the habit of reporting and transparency. In addition, the “community” nature of the UNGC – national networks, connections, events, publications of best practice etc – creates encouragement, inspiration and momentum. The GRI, on the other hand, is a formal reporting framework which requires a much more rigorous approach to CSR and transparency and can often be rather daunting for the first-timer. A GRI report requires attention to the material issues (though many reporters conveniently forget about materialiy matrices !) and requires reporting data on key indicators, whether this is favourable to the company or not. A company needs to be fairly well down the CSR practices track before it can report GRI, though it can be just at the start of the journey when it adopts the UNGC framework.

JAMES (@JEPSTEINREEVES) : How do other Twitter users feel?
Bart (@UNGCCritics):

The Global Compact, the UN’s flagship CSR initiative, was founded in 2000. It encourages businesses worldwide to adopt sustainable and socially responsible policies. It is a principle-based framework for businesses, stating ten principles in the areas of human rights, labor, the environment and anti corruption.

Photo credit: United Nations Photo

According to the executive director of the Compact, it is now the “world’s foremost social responsibility initiative”. Those who suffer the impacts of the activities of some of the participants in the Compact will most probably disagree. In August 2008, half of the ten most controversial companies in the world were Global Compact participants. Since its inception, the Compact has been on the receiving end of considerable criticism from civil society organizations and other stakeholders. They tend to believe that the Compact is toothless and that it is a mechanism for bluewashing. Moreover, many of them feel that there is a need to restrict commercial and corporate influences in UN affairs.

Global Compact Critics endeavors to point out what is missing in the Compact and what the UN should do to create an efficient mechanism, with a monitoring and enforcement function, to contribute to corporate accountability worldwide.

Elaine (@elainecohen) Tuesday 27th October 09:

Hi Bart, thanks for contributing to this discussion – i believe GC critics is an important voice and plays an essential watchdog role in the UNGC activities. Where we differ is that i do not believe that the UNGC role is to monitor, police and enforce. I believe it is successful because of the way it encourages and inspires to action, rather than becoming another quasi-regulatory body. There are 7000 organisations which declare adherence to the principles. Some of them surely see it as another PR exercise, but many provide outstanding examples of responsible behaviour. Opposite the ten “most controversial companies” there are i believe tens of “role-model” companies, and hundreds of “genuinely developing responsible practices” companies. I feel we should value the GC for what the very good model that it is, rather than trying to turn it into something different.

Chris (@britesprite)
While I applaud anything which advances CSR and sustainability in general, I have to admit I’m not a fan of the Global Compact.

I understand and fully appreciate Elaine’s comments about how the principles are deliberately broad .. indeed, we’d be in trouble if all of these schemes were as complicated as GRI!

However, they seem to be so broad as to be meaningless, and it’s only with the delistings in the last year of so that there has been any kind of stick to go with the carrot.

In the meantime bluewash companies get to say “United Nations endorsed” on their publicity material, which almost seems to demean the UN rather than enhance it.

Bart (@UNGCCritics):

Dear Elaine,

Thank you for your valuable ideas.

I think you have touched on one of the most contentious issues: the debate on quantity versus quality. The Global Compact will admit any company, no matter how bad it behaves. We are currently analyzing data on the companies that have been delisted from the Compact. It is too early to draw conclusions, but preliminary findings show that the Compact has failed to accomplish its goals in many developing countries. The worst case is probably the Philippines, where over 90 percent of the participating businesses were delisted. In Egypt 60 percent of the companies were delisted, and in Cameroon 72 percent. Even in some of the member states of the European Union the Compact is performing poorly. In Romania 73 percent of the participating companies were delisted. Only two active Romanian companies remain. More than half of the Bulgarian business participants were expelled.

I would argue that less is more. The Compact should go for quality, not quantity. One way of ensuring quality is to implement effective monitoring and enforcement provisions. The current requirements for reporting are far too lax in my view.

JAMES ( @JEPSTEINREEVES )

Thanks everyone for the comments. Enlighten me, is the delisting something new that the UNGC is doing? Elaine, would you agree that in some ways by taking on anyone, it might water down the power of the UN? Bart, on the other hand, what’s wrong with the UNGC simply serving as a way for companies to get started?

Elaine (@elainecohen) (still Tuesday 27th October 2009)

Great discussion, guys, thanks. Need a few more women here though .. I’ll see what i can do 🙂

Personally, as you have probably gathered by now J, I like the GC framework. It admits a company only after a formal, public declaration by the CEO that the organization will adhere to, promote and report annually on the 10 principles. This is a firm clear promise by the top person in the organisation – we could normally expect that CEO’s would keep their promises, though of course, many don’t. Frankly, I believe that being kicked out of the UNGC is far worse a PR issue than not being “elligible” to join in the first place. I prefer this trust until proven otherwise approach.

In working with my clients, however, I now encourage them to develop their first COP BEFORE they confirm their participation in the GC, so that they don’t just sign up and do nothing. All the Companies i have brought on board recently (4) have posted or are ready to post COP’s, and i am working now with a number of other organizations to develop COP’s before they sign up.

Bart: I am interested to know what you would recommend in terms of more effective monitoring and enforcement . What are your thoughts on this?

Re: your question James, no, i dont think the lack of active participation by some of the members reduces the effectiveness of the Global Compact overall. There are many many positive companies and proven programs which are delivering true change, I was at the UNGC meetings in Istanbul earlier this year and saw at first hand how companies are energised and active. Like any membership organization, there are leaders and there are stragglers. Doesnt mean its all bad or that the positive actions count less.

JAMES ( @JEPSTEINREEVES )

To Chris’s earlier point, can you imagine if the UNGC were as complicated as the GRI?!? Bart, any recommendations on alternatives for monitoring & enforcement?

Would it be too simple to try to boil down our friendly disagreement on the UNGC as ultimately a debate about what motivates ideal behavior: carrots versus sticks?

Chris (@britesprite)

Now that’s an interesting thought, Elaine: making the commitment before applying for entry.

One of the reasons the GC got such a bad name was because many companies signed up, made the verbal commitment and then did nothing.  For years.  The mechanism was there to delist, but the UNGC didn’t use it.

Until a couple of years ago.  Which is why now, suddenly, lots of companies are being thrown out, because the GC is finally using the stick as well as the carrot (apart from the badge, was there ever a carrot?).

So if a company only gets to use the logo and be a member *after* they’ve made the first report, that would be alot better.  Given the broadness of the commitments that would nail a company more effectively than some wafty statement from the CEO.

It would also go some way to mollifying GC sceptics such as myself 🙂

CLICK HERE FOR PART 2


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