Global Compact Outlines Key Outcomes of 2007 Leaders Summit
(New York, 22 August 2007)
—The UN Global Compact Office today released its initial assessment of the major outcomes of the Global Compact Leaders Summit, which took place on 5-6 July in Geneva, Switzerland. Chaired by Secretary-General Ban Ki-moon, the Leaders Summit was the largest high-level event ever held on the topic of corporate responsibility, bringing together more than 1,100 leaders and representatives from business, government, civil society, labour, academia and the United Nations.
Through the launch of reports, impact assessments, action platforms and learning resources, as well as the convening of dialogues across all core issue areas, the Leaders Summit allowed the Global Compact’s multi-stakeholder base to candidly assess the initiative’s progress, renew commitment to the principles and project the Compact’s future course.
"Among the most fundamental conclusions from the Summit was a consensus among all stakeholders that organizing corporate practices around universal principles can be a winning proposition for both business and society", said Georg Kell, Executive Director of the UN Global Compact.
The Leaders Summit produced numerous outcomes that have significant bearing on the future of the Global Compact initiative:
1. Global Compact governance fully implemented and thriving
The event fulfilled its role as the Global Compact’s chief governance mechanism – one that is designed to provide maximum ownership of the initiative by its stakeholders. In doing so, the Leaders Summit brought to a successful conclusion a two-year effort to fully implement all elements of the Global Compact’s unique multi-centric governance system adopted in August 2005: Triennial Global Compact Leaders Summit, Global Compact Board, Local Networks, Annual Local Networks Forum, Global Compact Office, and UN Inter-Agency Team.
2. Leaders Summit participants renew and deepen commitment to advance Global Compact principles
Summit participants deepened their collective commitment to embedding universal values in economies and markets. The 21-point “
” carries forward the philosophy that through responsible business practices a more sustainable and inclusive global economy can be realized. The declaration identifies priority actions for participants, such as mobilizing subsidiaries to engage in Global Compact Local Networks and encouraging supply chains to commit to the ten principles. Additionally, it contains actions for governments, including cultivating enabling environments for business and supporting responsible business practices.
In addition, the Summit exposed chief executives to learning and dialogue opportunities in many of the Global Compact’s priority issue areas through roundtable discussions on human rights, labour, environmental responsibility, anti-corruption, responsible investment and UN-business partnerships. For example, in the area of human rights, business was challenged to introduce human rights-specific policies in advance of the 60th anniversary of the Universal Declaration on Human Rights in 2008. The roundtable discussions provided important content which will shape the future direction of the Global Compact’s work programs in these areas.
3. Diversity of Leaders Summit participants – across geography, industry and stakeholder groups – results in rich exchange of experiences and perspectives
With participants from approximately 90 countries, the Leaders Summit reinforced the truly global nature of the Global Compact and the unifying commitment of companies from vastly different social and economic environments to corporate responsibility. There was representation and engagement from North, South, East and West. For example, the delegation of 100 top Chinese executives hosted a breakfast meeting on corporate action to combat climate change.
Nearly 200 representatives from civil society, labour and academia provided important voices and views in plenary and break-out sessions, furthering their critical role as constructive, necessary partners of the Global Compact who seek to hold businesses accountable for their commitments.
4. Government Ministers adopt “Chairperson’s Summary of Ministerial Roundtable on the Role of Governments in Promoting Responsible Corporate Citizenship”
Ministers and other high-level Government officials participating in the Leaders Summit held a roundtable on the role of Governments in promoting corporate citizenship. Chaired by H.E. Sheikha Haya Rashed Al Khalifa, President of the 61st Session of the United Nations General Assembly, the ministerial roundtable was attended by governments from North and South. Consensus was reached on the Chairperson’s Summary which lays out ways in which governments can support responsible business practices, including by creating enabling environments, raising awareness, developing tools and providing funding for voluntary initiatives.
5. Leaders Summit serves as launching pad for numerous action initiatives, stock-taking reports and learning resources
A bounty of new initiatives, studies and resources launched at the Leaders Summit will help the Global Compact continue to provide issue leadership and guidance on matters related to implementation of universal values into business practices, as well as cross-sector partnerships.
In preparation for the Summit, two stock-taking reports were prepared to stimulate discussion and debate among participants. The Global Compact released its first
which contains the results of an in-depth survey of business participants regarding their efforts to implement the ten principles, engage in partnerships and work with Local Networks. Also, McKinsey & Company presented findings from its first comprehensive global CEO survey on the topic of business and society, looking specifically at the key socio-economic and political mega-trends shaping the leadership agenda.
Through the “
Caring for Climate
” platform, chief executives of 150 companies from around the world pledged to speed up action on climate change and called on governments to agree as soon as possible on Kyoto follow-up measures to secure workable and inclusive climate market mechanisms.
Principles for Responsible Management Education
is the first large-scale initiative developed for academic institutions to advance corporate responsibility through the incorporation of universal values into curricula and research. The PRME was co-convened by leading business management organizations and developed by an international taskforce of sixty deans and official representatives of leading business schools.
CEO Water Mandate
is designed to help companies better manage water use in their operations and throughout their supply chains.
Resources and tools:
Numerous publications and online tools were released to aid Global Compact participants in implementing the ten principles, engaging in partnerships and communicating progress on corporate responsibility actions, including:
6. Mainstreaming of responsible investment practices provides compelling incentive for business to address environmental, social and governance issues
Goldman Sachs research launched at the Leaders Summit greatly bolsters the emerging argument that addressing environmental, social and governance (ESG) issues is an important element for ensuring a company’s long-term value. After applying an ESG research and investment framework in six sectors (energy, mining, steel, food, beverages, and media), Goldman Sachs found that companies considered leaders in implementing ESG policies have outperformed the general stock market by 25 percent since August 2005. In addition, 72 percent of these companies have outperformed their peers over the same period.
Another key indicator of the mainstreaming of responsible investment is the astounding growth of the Principles for Responsible Investment (PRI) in just over one year since launching, with more than 200 institutional investors representing over US $9 trillion in assets signed on to the initiative. A report released at the first annual PRI meeting, held in Geneva in conjunction with the Leaders Summit, shows that the PRI signatories, many of whom rank among the global giants of investing, are now actively integrating ESG issues into their investment policies and engagement strategies – with 88 percent of investment managers and 82 percent of asset owners conducting at least some shareholder engagement on ESG issues.
Together, the growth of PRI and Goldman Sachs’ ESG investment findings greatly underscore and contribute to the business case for corporate responsibility – serving as a powerful catalyst for increased efforts by business to implement universal principles into their operations.
7. UN-business agenda receives recognition and gains momentum
Chaired by Secretary-General Ban Ki-moon, the Leaders Summit gave fresh impetus to the UN-business agenda. It strengthened the case for system-wide UN-business engagement by showing the ability of corporate responsibility and cross-sector cooperation to contribute enormously to UN goals. Importantly, the Summit also reflected the ability of the UN to engage with business to meet common challenges in today’s globalized world and demonstrated why and how the UN is making business an active partner. Additionally, the importance of practical UN-business partnerships – in areas such as development, education, financial markets and water – was reinforced.
In an effort to improve the capacity of the UN to engage with business, several resources and tools were launched during the Leaders Summit, including a new UN-business website, a partnership assessment tool and a guide for partnering with NGOs and the UN. In addition, a meeting of high-level representatives of UN Agencies, Funds and Programmes, including six heads, was held during the Summit to discuss ways to enhance UN-business collaboration. Such a meeting is an excellent indicator of increased collaboration and cooperation with business across the UN system in the future.
The major outcomes of the Leaders Summit – renewed multi-stakeholder commitment, deepening of business engagement, growing financial market incentives, increased governmental support and strengthening of the broader UN-business agenda – all point to the conclusion that working with business in a principled and pragmatic approach is one effective means for the United Nations to achieve its goals of global security, development and realization of human rights. Further developing the linkages between the Global Compact and the UN could provide for increased effectiveness of the broader UN-business agenda. In addition, continued leadership of the Global Compact by the Secretary-General remains essential for ensuring that this agenda not only makes lasting changes in economies and societies everywhere, but also throughout the United Nations System.
The Leaders Summit outcomes also highlight the need for strengthening of the Global Compact’s integrity measures – for example through quality management and brand protection – in order to ensure the continued growth and increased effectiveness of the initiative. It is equally important for the Global Compact to continue to identify and facilitate, when possible, market-based incentives for companies to implement the ten principles into their operations. Increased scale of responsible corporate practices is the only way that the Global Compact can help achieve a new phase of globalization which provides opportunities and wealth in all corners of the earth.
The main outcomes of the Leaders Summit also underscore the importance of continued caretaking of the Global Compact’s unique, multi-centric governance framework. It will be a challenge to ensure that all elements – the Leaders Summit, Local Networks, the Annual Local Networks Forum, the Global Compact Board, the Global Compact Office and the Inter-Agency Team – reinforce one another and operate in a synergistic manner. Maintaining the right balance between governmental support, UN mandate and outward business orientation will be critical.
Certainly, additional implications for the Global Compact’s future will emerge given the variety of outputs from the Leaders Summit, including the Geneva Declaration, the Chairperson’s Summary of the Ministerial Roundtable, new action initiatives on environment and education, surveys of business implementation, issue-focused working groups, and renewed multi-stakeholder commitment. Tangible adjustments and updates to the Global Compact’s strategy and day-to-day operations will undoubtedly result in due course. However, the core objective of the Global Compact is unwavering: to ensure that businesses everywhere contribute to a more sustainable and inclusive global economy through embedding universal principles into operations and corporate culture.
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