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UN Global Compact Annual Review Highlights Progress Made, Identifies Gaps in Corporate Responsibility Practice

Thumb Cover AR ( New York, 8 April 2009 ) – As the global economic crisis highlights the need for longterm-sustainability and business ethics, corporations around the world are making progress in adopting responsible business practices. Yet, serious implementation gaps remain, particularly in supply chain management and subsidiary engagement. These are some of the key findings of the United Nations’ largest-ever corporate responsibility survey, presented today at the launch of the UN Global Compact Annual Review 2008.

Based on survey responses from more than 700 Global Compact business participants in 90 countries, the Review measured and analyzed the extent and depth of corporate engagement in the world’s largest voluntary corporate responsibility initiative.

Indicating heightened interest in the management of environmental, social and governance challenges, participation in the Global Compact rose to a record high in 2008. 1,473 new businesses joined the initiative – a 30 percent increase over the previous year – bringing the total number of businesses in the Global Compact to over 5,000 in more than 130 countries. Noteworthy is the growing engagement of companies in China and India. Both now rank among the top ten countries by total number of participants.

More companies than ever before are now disclosing their practices under the Global Compact’s unique mandatory disclosure framework, also known as the Communication on Progress (COP). More than 1,700 COPs were submitted in 2009, marking a 25 percent increase over 2007. At the same time, more than 400 business participants were delisted in 2008 for repeated failure to communicate progress, bringing the total number of companies removed from the Global Compact to over 800.

While participating businesses have taken action on a broad range of individual issue areas, the survey reveals serious deficits in engaging corporate supply chains: Only seven percent of respondents currently require suppliers to join the Global Compact, while 27 percent reference the initiative in supplier contracts. Likewise, only 30 percent of companies with subsidiaries require them to implement the Global Compact and its principles and assess progress made.

A growing number of corporations have emerged as sustainability leaders, taking a proactive stand on pertinent challenges. Consequently, the Global Compact’s special engagement platforms on climate change and water have seen steady growth in signatories in 2008. More than 300 companies now support Caring for Climate, while the CEO Water Mandate has been endorsed by nearly 50 businesses committed to water sustainability.

“The fallout of the financial crisis has put a spotlight on issues that the United Nations Global Compact has long advocated as essential responsibilities for the modern corporation”, said Georg Kell, Executive Director of the United Nations Global Compact. “The Annual Review 2008 underscores the Global Compact’s positive contribution to the worldwide diffusion of responsible business practices. However, companies everywhere must do much more to ensure that environmental, social and governance challenges are understood and properly addressed. For corporate responsibility to deliver tangible results, suppliers and subsidiaries must be made part of the equation”.

Annual Review (pdf)

Media Contact

Gavin Power
Deputy Director
UN Global Compact