Business Leaders Adopt Declaration on Responsible Business Practices

As Global Compact Leaders Summit closes in Geneva, participants pledge to pursue a more sustainable and inclusive economy

Business leaders from developed and developing countries today pledged to comply with labour, human rights, environmental and anti-corruption standards as a two-day conference closed in Geneva.

At the second United Nations Global Compact Leaders Summit, top executives of corporations such as Coca-Cola, Petrobras, Fuji Xerox, China Ocean Shipping Group, Tata Steel, L M Ericsson and Banco Bilbao Vizcaya Argentaria adopted the 21-point Geneva Declaration, which spells out concrete actions for business, governments and United Nations Global Compact participants.

Some 4,000 organizations from 116 countries — among them trade unions, non-governmental organizations (NGOs) and some 3,100 businesses — have so far subscribed to the Global Compact, pledging to observe ten universal principles related to human rights, labour rights, the environment and the struggle against corruption.

The Geneva Declaration expresses the belief that “globalization, if rooted in universal principles, has the power to improve our world fundamentally — delivering economic and social benefits to people, communities and markets everywhere”.

“The need for action is urgent,” the document says. “Poverty, income inequality, protectionism and the absence of decent work opportunities pose serious threats to world peace and markets”.

“Business, as a key agent of globalization, can be an enormous force for good”, the Declaration says, adding that companies, by committing themselves to corporate citizenship, can create and deliver value in the widest possible terms. Globalization can thus act as an accelerator for spreading universal principles, creating a values-oriented competition for a “race to the top”.

Summing up the outcome of the meeting, Secretary-General Ban-ki Moon told participants that “through several groundbreaking reports, you have made it abundantly clear that market leadership and sustainability leadership go hand-in-hand. This will help us build the supportive measures needed to create more sustainable markets. And it will ultimately help improve the lives of many people around the world.”

Stressing that the voluntary character of the Compact “does not mean unaccountable,” Mr. Ban called on business leaders to convene board meetings to share developments at the Summit, and ensure that the Global Compact is fully implemented within their companies and through their suppliers and business partners.

The Secretary-General called on civil society and labour leaders “to remain vigilant and engaged and continue to hold businesses accountable for their commitments.” He called on governments to support the Global Compact as a unique public-private partnership initiative. And he called on the United Nations to integrate the Global Compact principles throughout the Organization.

“Together, through the Geneva Declaration, we have deepened our collective commitment to embedding universal values in economies and markets,” Mr. Ban said. “Let us each do our share to give practical meaning to the Declaration.”

“Dear friends, together we can achieve a new phase of globalization — one that creates inclusive and sustainable markets, builds development and enhances international cooperation. We each have a responsibility in moving our agenda forward. Let us leave here today with renewed commitment.”

“We had a remarkable successful meeting,” said Anglo American Chairman Sir Mark Moody-Stuart at the closing plenary. “At the first summit three years ago, many companies subscribed to the Global Compact principles because it sounded like the right thing to do, but did not really know how to put them into practice. We are now moving forward towards implementation.”

Today, a Ministerial Roundtable chaired by General Assembly President Sheikha Haya Rashed al Khalifa discussed the role of governments in promoting responsible corporate citizenship.

Also today, six parallel sessions focused on human rights, labour, climate change and the environment, United Nations-business partnerships, corruption and responsible investment. Speakers included United Nations Human Rights High Commissioner Louise Arbour, International Labour Organization Director-General Juan Somavia, Intergovernmental Panel on Climate Change Chairman Rajendra K. Pachauri, United Nations Environment Programme Executive Director Achim Steiner, Nestlé Chief Financial Officer Paul Polman, United Nations Office on Drugs and Crime Executive Director Antonio Maria Costa and Goldman Sachs Chief Investment Officer Anthony Ling.

On the role of business in society, the Declaration notes that responsible business practices contribute to social and economic inclusion, helping to advance international cooperation, peace, development and human rights protection. It invites businesses to establish partnerships and collaboration with governments, civil society and labour, and states that in countries afflicted by conflict or weak governance investors and companies can play a more helpful role by engaging rather than divesting — provided they act in line with the Global Compact principles.

Investors should encourage companies to be transparent and to pursue responsible business practices, the Declaration says, while lenders should ensure that their loans are in line with international standards. Investors should also urge governments to act responsibly and uphold laws and international norms.

Governments should cultivate environments with effective economic institutions and supportive policy to promote stability, transparency and entrepreneurship, says the Declaration. Governments should also support an open international trading system, discourage protectionism and ratify and implement international instruments on labour standards and against corruption.

For their part, Global Compact Participants should follow a principles-based approach in their strategy, operations and culture, the Declaration says. This involves encouraging supply chain and business partners to commit to the Compact’s ten principles, and carry out advocacy on climate change and development.

Global as well as local initiatives were launched at the Summit. Through the “Caring for Climate” platform, Chief executive officers (CEOs) of 150 companies from around the world — including 30 from the Fortune Global 500 — 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.

The CEOs of six corporations — The Coca-Cola Company, Levi Strauss & Co., Läckeby Water Group, Nestlé S.A., SABMiller and Suez — urged their business peers everywhere to take immediate action to address the global water crisis. They launched “The CEO Water Mandate”, a project designed to help companies to better manage water use in their operations and throughout their supply chains.

Also launched at the Summit, the “Principles for Responsible Investment” seek to disseminate the tenets of corporate citizenship among capital markets. The “Principles for Responsible Management Education” seek to take the case for universal values and business into business schools around the world.

A total of 1,027 people registered for the Summit — 638 from companies, 95 from government entities, 76 from international organizations, 65 from international business organizations, 62 from international NGOs, 45 from academia, 28 from the Global Compact network, 13 from foundations and five from international labour organizations.

The first Global Compact Leaders Summit took place in New York in 2004, and the next is planned for 2010.

Press release from the UN Global Compact

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