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Core Business Operations and Value Chains

Creating positive shared value for host countries and communities by mobilizing the innovative technologies, processes, products and skills of the private sector to help achieve international goals through what are increasingly called “inclusive business models”, “base of the pyramid” models, or creative capitalism. In some cases these alliances can be commercially viable from the outset, in others they require various forms of seed or venture financing, or hybrid approaches that include ongoing public, donor or philanthropic support.

At a minimum companies should aim to minimize any negative impacts by internalizing international principles, codes and industry standards into core business activities.

Key “development multipliers” from core business operations can include the following:

  • Producing safe and affordable products and services – especially improving access to meet essential needs such as nutrition, health, energy, water, education, finance, housing, and information.
  • Generating income and investment – through paying local wages, taxes, dividends, and royalties, making timely payment to local suppliers, and earning foreign exchange.
  • Creating jobs – recruiting locally, both within the company and along the supply chain, and facilitating constructive organized labour relations.
  • Developing human resources – investing in training, skills development, health and safety in the workplace and along the supply chain
  • Fostering entrepreneurship and building local businesses and business linkages – through supplier and distribution networks, especially with medium, small and micro-enterprises
  • Spreading responsible business standards and practices – in areas such as human rights, labour standards, environment, employee health and safety, ethics and anticorruption, conflict prevention, and product safety and quality.
  • Supporting technology development and transfer – investing in local research & development and spreading modern technologies from information technology to life sciences and low-carbon systems.
  • Establishing physical and institutional infrastructure – investing in plant and machinery, telecommunications and transport systems, and legal and financial frameworks and institutions.
  • Participating in collective platforms – initiatives aimed at mobilizing groups of companies around specific issues, such as “Principles for Responsible Investment”, “The CEO Water Mandate”, “Caring for Climate” and global health partnerships.

(Source: The United Nations and the Private Sector: A Framework for Collaboration, UN Global Compact Office 2008)

(Last Update: 2 January 2008)