What Is the United Nations Global Compact?

What Is the United Nations Global Compact?

Let me explain what the United Nations Global Compact is. It's a strategic initiative from the UN that backs global companies committed to responsible business practices in human rights, labor, the environment, and corruption. This initiative pushes for activities that support sustainable development goals to build a better world.

Key Takeaways

Here's what you need to know right away. The United Nations Global Compact is an initiative where global corporations can sign on to commit to responsible business practices in human rights, labor, the environment, and corruption. It features 10 operating principles that outline these values. For instance, a corporation in the compact might commit to providing free Wi-Fi access in remote areas of the world.

Understanding the United Nations Global Compact

You should understand that the UN Global Compact rests on 10 principles that define a company's value system and business approach. These principles come from key sources like the Universal Declaration of Human Rights, the International Labor Organization’s Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development, and the UN Convention Against Corruption. As a member company, you're expected to adopt business practices that benefit people and the planet while pursuing profits with integrity.

Expectations for Companies Joining the Compact

If your company joins the compact, you're expected to weave these principles into your corporate strategies, culture, and daily operations. You also need to advocate for them publicly and communicate progress to stakeholders. Any company committing to these principles can join—it's not legally binding and entirely voluntary.

Member Company Responsibilities of the UN Global Compact

As a member, your company must act in environmentally responsible ways regarding climate change, water and sanitation, energy, biodiversity, and food and agriculture. You should also recognize how environmental issues connect to social and development priorities.

Your focus needs to include social sustainability, especially human rights in labor, women’s empowerment and gender equality, children, indigenous peoples, people with disabilities, and those in poverty. The compact holds that governments primarily protect human rights, but businesses should contribute or at least avoid harm.

Businesses can contribute to human rights by creating jobs, developing goods and services for basic needs, promoting supportive public policies, partnering with others for greater impact, and making strategic social investments.

Incentives for Businesses to Support the UN Global Compact

You might wonder why companies join. It's often due to the value of corporate codes of conduct in building positive relationships with customers, employees, and stakeholders, and avoiding regulatory issues. Businesses support it for the greater good, but also because operating in areas with poverty, inequality, or weak rule of law can damage reputation and profits.

Companies committed to sustainability gain advantages like accessing untapped markets, attracting partners, innovating products and services in lower-risk settings, and boosting employee satisfaction and productivity.

Take this example of sustainable activity: a member company could support inclusive, equitable education and lifelong learning by partnering with governments and others to create open-source technology. This can deliver education to hard-to-reach communities and provide low-cost materials for under-resourced schools.