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UN asks business to help drive development

UN asks business to help drive development

For many of the United Nations’ sprawling agencies, an invitation to work closely with the private sector represents something of a culture shock. 

Under the Millennium Development Goals’ strategy of eradicating poverty, the notion of expanding ties with business barely registered with the development community.

But at the UN Global Compact, a voluntary platform for responsible corporate practice, the new Global Goals – adopted during the UN General Assembly in September – represent a chance to boost their long-standing mission of combining business with sustainability. 

“We think it’s great that the world community has now agreed these development priorities for the next 15 years – that puts up a lighthouse for business that is very clear,” says Lise Kingo, the Global Compact’s new Executive Director.

Established in July 2000, the Global Compact encourages companies globally to adopt sustainable business practices by committing to a set of voluntary rules, called the Ten Principles. The initiative currently has the support of over 8,000 companies and 4,000 non-business members.

Kingo, a former executive with Danish pharmaceuticals giant Novo Nordisk, who took over the leadership in September, has been drafted to head the New York-based agency at a crucial time. 

With Global Goals 8 and 9 specifically calling for economic growth, industrialisation and innovation, Kingo sees a vital window for the Global Compact to attract a wider range of businesses to its sustainability agenda. Given the Compact’s dependence on voluntary support, that mission is couched in the business-friendly language of growth and innovation. 

“I think we can hope that the new goals can energise the Compact and revitalise the commitment that some companies gave to the Compact years ago. We think the goals should be seen as a source of inspiration and a platform for new growth,” she says. 

Kingo says that the organisation will be advising its signatories on aligning the Goals with the Global Compact’s Ten Principles – a code covering human rights, labour rights, environmental sustainability and anti-corruption measures. 

In a bid to broaden that influence further, Kingo is targeting a higher number of small and medium enterprises. According to the International Finance Corporation, SMEs account for up to 90% of all businesses in sub-Saharan Africa. Without their support, the sustainability agenda will be little more than a series of footnotes in the forgotten annual reports of giant corporations. Yet small companies focused on building a customer base and keeping track of the bottom line may not always see sustainability as a top business priority.  

In response, Kingo has introduced a programme alongside the World Business Council and Global Reporting Initiative to encourage firms to focus on the goals that are most appropriate to their businesses. 

“We suggest the first thing you do is the screening of all the goals and seeing which is relevant to the business and then pick a couple – maybe two or three – and really begin to integrate them in the business,” she says. Without that focus, Kingo admits, compliance with a broad list stretching from climate action to reduced global inequalities is likely to be unrealistic.

“It would be very difficult for companies to address the Ten Principles and then relate to all 17 [Global Goal] targets in a substantial way. We like all approaches to be substantial so that when you commit yourselves to something, you do it, and you integrate it into your business.” 

Kingo says that the length of the Goals – the current programme replicates the Millennium Development Goals’ 15-year lifespan – will allow businesses to plan far in advance rather than having to make potentially disruptive changes overnight. 

“Often if businesses are to invest in new technology, or bringing down CO2 emissions, it’s important you know that this is a long-term priority, this will not change, this will be the future. It gives a lot more stability and prioritisation to where you put your investments and focus on innovation.” 

Despite the ambitious agenda, the key question remains whether an initiative that is purely voluntary can really gain the respect and compliance of businesses operating in a ruthless international environment. 

That question has taken on added urgency in the last few weeks after German automobile firm Volkswagen – a signatory to the Global Compact since 2002 – was found to have cheated on emissions tests. The scandal has led to widespread debate about executive responsibility and the effectiveness of commercial monitoring. 

Can corporations who flout strict regulations really be expected to abide by a code that largely reverts to dialogue? 

“This case in particular has created a lot of motion. We are all just asking ourselves, what happened?” says Kingo. 

The director says that she will be opening a dialogue with the company in a bid to get to the bottom of why the firm appeared to so brazenly ignore its commitments to the Compact.

“What we do in these cases is to contact the management and ask them to explain to us what’s going on and how these specific actions can be combined with being a member of the Compact. We are in the process…we are not taking any drastic steps, we would just like to have a good dialogue,” she says. 

That approach is unlikely to persuade critics who believe that the Global Compact is a useful pawn for businesses looking to fraudulently burnish their sustainability credentials. 

Yet the Compact has been unafraid to deal with companies who have openly flouted its regulations in the past – 657 members were expelled from the initiative in 2014, with many cut loose for failing to submit progress reports for at least two consecutive years. Over 3,000 companies were expelled from the initiative between 2005 and 2012 for failures of communication. 

For Kingo, dealing with the Volkswagen affair in a credible way will be the first challenge in a period that could transform the role of businesses in development. 

“I couldn’t help thinking back to the UN Rio Summit in 1992, when many of us could hardly spell sustainable development. Comparing that situation with how advanced we are today with having the world community adopt the 17 goals, that is amazing. It’s also amazing that business, clearly in the wording and presentation, is seen as a key player – I think that is very positive.” 

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