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Since the dawn of the new millennium, the United Nations System has been reaching out to people and businesses in the hopes of enlisting multi-stakeholder support toward the fulfillment of its mandate. This could be an attempt to stay relevant. Or to get further on less money. Maybe it’s a nod to reality, in the age of internet. What you need, I think, is to get past “why”, as in “why would you want to get your hands dirty by collaborating with industry?” (and the usual hand-wringing about whether corporations are taking over the U.N.), and focus on what it is people are doing and how it’s working out.
I first became aware of this trend about ten years ago, when I was at the Secretariat of the North American Commission for Environmental Cooperation and our neighbours (in Montreal’s World Trade Centre), the Secretariat of the U.N. Convention on Biodiversity, hired a bright young fellow to do business outreach. I remember thinking good luck with that and that was it. I will come back to CBD, as the Biodiversity Convention is known, in my next article on this topic. Today I will focus on the United Nations Global Compact, headquartered in New York.
The UN Global Compact operates from a simple premise: get companies to commit to following certain principles and reporting annually to their stakeholders on their progress toward following those principles in their operations. The Compact has 12,000 signatories, of which 8,000 are corporations, and of those, half are large corporations and the other half are small and medium-sized enterprises. You need to have at least 10 full time equivalent employees to join.
Why on earth, I thought, would any company choose to sign up for yet another one of these voluntary programs? I spoke to Ursula Wynhoven, Chief, Governance and Social Sustainability, and General Counsel, and Angus Rennie, Project Manager and Legal Consultant, UN-Business Partnerships, on a warm Thursday evening in December. Global supply chains, replied Wynhoven, a former employer-side labour lawyer who joined the UN twelve years ago after a stint with the OECD. Companies in emerging markets are looking to improve their performance on CSR indicators in order to demonstrate that they have what it takes to be suppliers to multinationals that have increasingly exacting procurement policies. It occurs to me that the U.N. brand — nothing to sniff at — is probably also a factor.
I asked Wynhoven about enforcement. The website flags participating members. If you fail to report, you get marked as “non communicating” and risk being de-listed from the initiative. She is aware of one case, in France, where a party to a lawsuit sought to invoke a defendant’s commitment to the UN Global Compact as legally binding. The judge rejected the argument because of the voluntary nature of the commitment.
What I found most interesting about the programme is its country networks. There are eighty (80) of them. China and India, for example, have strong country networks. They are run by participating members, for members, sometimes with a dedicated secretariat and sometimes from within the offices of a CSR-type organization. I like the idea of these networks because they allow member companies to access players in markets they may be interested in. We all know that relationships are key to doing business, and that this is all the more true when you’re feeling your way in a foreign market and alien business culture. The silver lining, I think, is that here, you’re networking with people who like you have taken an anti-corruption oath, meaning that in some places, you are boldly going where few have gone before, that is to say, through the front door.
At these gatherings, participants tackle problems in areas ranging from water to climate to corruption, either at in-person events or in webinars. As a professional services provider, I am drawn to these networks like a bear to a honeycomb. So, I asked, have you got a problem with consultants crashing your gatherings? Consultants with specific knowledge to share are welcome. However, there is a strict no-solicitation policy in effect. In addition, consultants may not, without permission, use information obtained at such events for commercial purposes.
The UN Global Compact can be sliced into geographic and issue-based networks, but it’s also started working hard at the sectoral level, which I’m quite keen on. Real estate and construction, and agriculture, for example, with a focus on arriving at sector specific understandings of corporate sustainability. In addition, the U.N. cooperates with global industry associations, such as IPIECA for oil and gas and ICMM for mining. And they have all kinds of initiatives, like a Global Compact 100 stock index, a CSR guide for General Counsel (so, not just what’s legal, but what’s “acceptable”), and something called “Business for the rule of law”, which engages business on respect and support for the rule of law.
The kinds of things the UN Global Compact is trying to help companies get right range from “horizontal incoherence” in large companies, exemplified by a failure to track the aspirations set forth in company policy through to the operational level, like HR and purchasing, to wealth polarization. I asked about the latter problem, because for the past two years at the Conférence Internationale des Amériques in Montreal, OECD Secretary General Angel Gurria has hammered away at this issue: it’s a huge problem that’s getting worse. I am told that companies that adopt more inclusive business models — that source from and hire locally —have fared better when people have taken to the streets; for example, not suffering damage during looting following controversial elections in Kenya some years back.
I once heard it said that the City of Montreal would not pass a bike-helmet bylaw until at least half of all riders were using them already. This is where the UN Global Compact fits in. Companies seeing that it makes sense, from a growth perspective, to move in the direction of aligning operations with non-binding standards. It helps with getting clients and financing, it rationalizes operations, and it protects investments from a wide range of risks. All of this makes sense, provided (i) it can be done at a price which does not cut you out of the game, or (ii) there is a buyer willing to pay a premium for equitably sourced product.
It takes a special kind of person to cross the border from private practice (PPPs, civil litigation) to the lofty heights of the UN headquarters for the purpose of helping people bridge those worlds. Angus Rennie says McGill Law School, with its bijuridical law programme, made the choice seem obvious. “I did politics and government before law, and I worked at a hybrid U.N.-Cambodia human rights tribunal before doing PPPs at Blakes. I’m challenged by the diversity of perspectives and attracted by public service.” Wynhoven was drawn to the UN Global Compact for the same reason she initially became a litigator: out of a desire to effect social change. Having seen firsthand the benefits but also the limitations of litigation, she believes strongly in the potential for voluntary initiatives to build the consensus needed to make the world better.
For information on Canada’s country network, contact Helle Bank Jorgensen, Head, Global Compact Network Canada at Jorgensen@globalcompact.ca or Megan Wallingford, Program Officer at wallingford@globalcompact.ca.