Companies working together for a sustainable future

Companies working together for a sustainable future

November 28, 2019

Companies working together for a sustainable future

The Global Compact is a United Nations network that applies the ethical principles of the Universal Declaration of Human Rights to corporate policies with a view to developing a sustainable economy

At the United Nations General Assembly held in September in New York, the contribution and role of companies with regard to sustainability was also discussed. The Global Compact (GC), a United Nations network consisting of more than 9,500 companies in 160 countries, plays a key role in this context: it is a strategic initiative that encourages businesses from all over the world to create the conditions for promoting a sustainable economy. To achieve this, it demands that its member organizations and companies apply universally shared principles, derived from the Universal Declaration of Human Rights, the Rio Declaration and the United Nations Convention against Corruption, within their sphere of influence. 

How do we build a sustainable economy? Corporate sustainability is intrinsically linked to a company’s own value system and its approach to the market, but every company must meet certain basic requirements in the areas of human rights, labor, the environment and anti-corruption.

Specifically, businesses should support and respect the protection of internationally proclaimed human rights (principle 1) and make sure that they are not complicit in human rights abuses (principle 2); at work, businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining (principle 3) and the elimination of all forms of forced and compulsory labor (principle 4), the effective abolition of child labor (principle 5) and the elimination of discrimination in respect of employment and occupation (principle 6). With regard to the environment, principles 7, 8 and 9 state that businesses should support a precautionary approach to environmental challenges (7), undertake initiatives to promote greater environmental responsibility (8) and encourage the development and diffusion of environmentally friendly technologies (9). Finally, businesses should work against corruption in all its forms, including extortion and bribery (principle 10). 

A sustainable economy requires the same principles to be implemented regardless of where a business operates, since good practices in one area do not compensate for any damage caused in another. In this scenario, the UN Global Compact has also launched three initiatives to support the global transformation of companies, the so-called “Global Impact Initiatives”.

For a less polluted environment

The first of the three initiatives is of an environmental nature and aims to reduce global warming so as not to exceed the limit of 1.5 °C. More than 650 companies have already committed to this, and the Global Compact Network is confident that this number will increase significantly following COP25, the 25th UN Climate Change Conference, scheduled for this December in Chile. However, the biggest challenge is to aim for zero carbon emissions by 2030. Switching to a sustainable low-carbon-emission economy would also be a good deal: the network estimates that it would generate a turnover of $26 trillion, which could create 65 million new jobs. 

A matter of gender

According to the McKinsey Global Institute, closing the gender economic gap would add $28 trillion to the global annual gross domestic product by 2025, but at the current rate this will happen in 200 years’ time. This is why the second initiative, called Target Gender Equality, has the ultimate goal of working with companies all over the world to set ambitious yet tangible goals in order to increase women’s representation on boards and in top management, so that the economic goals of the McKinsey Global Institute can be achieved. A research study suggests that the minimum number of women in senior positions should be 30 percent, which would be a real breakthrough for many companies and an excellent basis for a sustainable economy.

Development goals as opportunities for a sustainable economy

Several recent surveys promoted by Global Compact have shown great awareness among managers of large companies of the 10 founding principles of human rights (about 90% know them) and of the sustainable development goals (SDGs, more than 80% know them). And yet, when CEOs participating in the network are asked if they think that the businesses they represent have a crucial role to play in achieving these goals, 71% of them agree, but only 21% believe they have truly committed themselves. This is why companies urgently need to better integrate the principles and actively engage in achieving the SDGs through business strategies, business operations and the involvement of all stakeholders. This is the aim of the third and final initiative, “SDG Ambition”, as part of which clear guidelines have been laid down, offering support to more than 1,000 companies worldwide to turn risks into opportunities and, by doing so, preserve the planet.

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