The United Nations has come in for a lot of stick lately, not least for
its failure to agree on substantial reform at last month’s World Summit
in New York. But it can justifiably claim credit for three important
developments. On the Global Compact, the Norms on the Responsibilities
of Transnational Corporations and other Business Enterprises, and the
Millennium Development Goals, the UN has taken positive action.
First, the ‘integrity measures’ of its Global Compact (see page one).
The absence of any monitoring mechanism over the five years of the
Compact’s existence seriously damaged the credibility of the Compact
Office and signatories alike. It was in effect a club anyone could
join. It still is, but the new mechanism should highlight those not
acting in the spirit of the rules. In establishing a complaints
procedure, the UN Global Compact Office has bowed to the inevitable.
Investors have for quite a while wanted some teeth put into this
international initiative. Now Innovest, the SRI research and advisory
firm, has created a product to meet the demand. Its Global Compact Plus
research tool will assess company performance and identify the best.
Such external monitoring will keep the companies involved – more than
2400 at last count – as well as the Compact itself on their toes.
It remains to be seen whether the Compact becomes a lightning-rod for
pressure group gripes. The OECD’s guidelines on multinational behaviour
have attracted numerous complaints, and some are taking years to
resolve. The two initiatives are not strictly comparable, but the
Compact Office now runs the same risk.
Second, the appointment of John Ruggie as a special UN representative
to guide the development of the Norms (see page seven). Besides being
an old UN hand, Ruggie played an important role in creating the Global
Compact and is heavily involved in CSR education. He is well placed to
advise on thorny issues such as the extent to which companies should be
held to account for the actions of their subsidiaries.
Third, the Millennium Development Goals. These were singled out in the
World Summit’s final declaration. All countries have now said they will
put in place ‘comprehensive national development strategies’ for
internationally agreed objectives, ‘among them the Millennium
Development Goals’. Of course, saying is one thing, doing another. But
this is an opportunity for business to show leadership. Some companies,
like Diageo in its latest corporate citizenship report, already
specifically link their CSR effort with the eight ambitious goals on
poverty, education, disease and the environment. Many more need to do
so.
