GENEVA
The twin challenges of climate change and rapid globalization are driving more major companies to sign on to the United Nations Global Compact, a seven-year-old voluntary pact to promote responsible corporate practices, say international leaders, diplomats and observers.
At the end of a two-day summit of Global Compact leaders Friday, U.N. Secretary-General Ban Ki-moon said the results of the gathering “made it abundantly clear that market leadership and sustainability leadership go hand in hand.”
Although the public-private partnership forged by the Global Compact has helped achieve significant progress, he said, the business community is linked too often to “wrongs and disruptions that afflict communities and markets around the planet.”
Mr. Ban told more than 1,000 business leaders, politicians and civil society representatives that corporate leaders need to ensure that the U.N. accord is implemented more fully within their organizations and through suppliers and partners.
The secretary-general also called on civil society and labor leaders “to remain vigilant and engaged, and continue to hold businesses accountable for their commitments.”
Some advocacy groups and environmental activists were skeptical about the effectiveness of the compact because of its voluntary nature and the lack of a compliance mechanism. Business groups have resisted efforts to make the principles contained in the agreement binding on their operations.
Daniel Mittler, an advocate for Greenpeace International, said the compact’s principles are “too vague to be meaningful and fail to be clearly defined and enforced.”
Irene Kahn, secretary-general of Amnesty International, said that “if you create a big tent, you run the risk of bringing everyone down to the lowest common denominator.”
“I would hope that what the compact would do is push people to the higher level and not down, no matter what sector of industry they’re in, no matter what their size,” she added.
She applauded use of the corporate compact to build awareness among business executives and to help companies understand these principles, but said that “where the compact falls short is that it has no compliance mechanism.”
Coca-Cola Chairman and Chief Executive Officer Neville Isdell defended the voluntary nature of the compact, saying, “Governments can enforce accountability, but they cannot engender responsibility. Responsibility is a choice, and a global compact allows us business people to make that choice.”
He added, “We don’t want anyone to be a free rider on the Global Compact.”
The compact last year delisted 600 companies that had not met its voluntary reporting requirements and is likely to delist as many this year.
The Global Compact, established by the United Nations in 2000, laid out 10 principles for businesses to follow on human rights, labor practices, environmental protections and fighting corruption.
More than 3,000 corporations, along with labor unions and nongovernmental organizations from 116 countries, have subscribed to the compact and pledged to observe its principles.
During the summit, 153 companies, including market leaders DuPont and Pfizer Pharmaceutical, pledged to expedite efforts to increase energy efficiency and to reduce carbon output.
Asked about the compact’s prospects, Wolfgang Petritsch, Austria’s ambassador to the United Nations in Geneva, said the idea “is still in the beginning, and we don’t know how it will develop.”
“But I’m confident business realizes there’s an obligation, a responsibility that goes beyond the sphere of economics,” he said.
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