Who’s Responsible? UN Launches New Plan to Engage Business Leaders

GLOBE-NET, September 21, 2013- Over a thousand CEOs and C-suite executives wrapped up a meeting in New York last week with an endorsement of a new architecture to drive and scale up corporate actions to directly advance United Nations goals. But doubts remain if it will be enough to bring about real change. 

The UN Global Compact Leaders Summit, chaired by UN Secretary-General Ban Ki-moon, brought together chief executives with leaders from civil society, Government and the United Nations to set the stage for business to shape and advance the post-2015 development agenda by putting forward a new architecture for business to contribute to global priorities, such as climate change, water, food, equality, decent jobs, and education.

The UN Global Compact is the world’s largest corporate sustainability initiative, with the participation of 8,000 companies and 4,000 civil society organizations from 145 countries.

A report launched at the Summit found widespread CEO agreement on the strategic nature of sustainability. The vast majority are calling for action by Governments, investors and consumers to unlock the full potential of corporate sustainability.

The new architecture  report, Building the Post-2015 Business Engagement Architecture stresses the pieces are in place for coordinated action on a level never before seen, with all major stakeholder groups – including business, investors, Governments, UN entities, civil society, and labour developing orientations, strategies and capacities for sustainable development in the broadest sense of the term.

With respect to business, in order to fully realize the benefits and outcomes and to contribute to sustainable development in the most meaningful ways – companies will need to move beyond first-mover approaches and embrace partnerships and collective action initiatives that unite business peers, often for the first time, as well as other stakeholders, according to the report. 

In other words, corporate leadership in the new era will mean working with others on an entirely new scale through partnerships and the pooling and sharing of resources. 

From Good Intentions to Significant Action

Earlier this month the United Nations Global Compact released its flagship Global Corporate Sustainability Report 2013, based on survey of nearly 2,000 companies across 113 countries on actions being taken by business to embed responsible practices into their strategies, operations and culture. 

Those findings show that companies committed to the UN Global Compact are moving from good intentions to significant actions, but problems remain.

Key findings of the report are:

• There is a clear gap between what companies “say” and what they “do”. Companies are making commitments, defining goals and setting policies at high rates, but still have much work to do to on the action steps. For example, 65 percent of respondents develop sustainability policies at the CEO level, while only 35 percent train managers to integrate sustainability into strategies and operations.
• Size is the most significant factor in sustainability performance.  While small and large companies are committing to the UN Global Compact in equal numbers, large companies are significantly more likely to move beyond commitment to action across all issue areas. However, the survey has uncovered an encouraging development:  smaller companies are increasingly taking steps to catch up to their larger peers.
• Supply chains are a roadblock to improved performance.  Supplier sustainability ranks as the top barrier for large companies in their advancement to the next level of sustainability performance. While a majority of companies have established sustainability expectations for their suppliers, they are challenged to track compliance and help suppliers reach goals, for example.

• Everyone benefits from a better world. Seventy percent of Global Compact companies are advancing broad UN goals and issues, by aligning their core business strategy, tying social investment to core competencies, advocating the need for action, and implementing partnership projects.  

The Global Economy is on the Wrong Track

The principal barrier to further progress in embedding sustainability into business as reported by CEOs in another survey is the lack of a clear link between sustainability and business value. The report, UN Global Compact-Accenture CEO Study on Sustainability 2013 – Architects of a Better World, states the global economy is on the wrong track, and business is not playing its part in forging a sustainable future.

Of more than 1,000 CEOs across the world interviewed, just 32% believe that the global economy is on track to meet the demands of a growing population within global environmental and resource constraints, and a clear majority-67%-do not believe that business is doing enough to address global sustainability challenges.

No Business Case for Sustainability 

There are no easy answers to the issue, notes the Accenture CEO Study. Amid prolonged economic pressures business leaders are struggling to make the business case for action on sustainability.

Adding to the bottom line concerns of business are looming climate change impacts, growing public reaction about environmental degradation, shifts in consumer attitudes and consumption patterns, and increased government oversight on the management of scarce natural resources.

The many challenges facing business that are redefining concepts of corporate responsibility for sustainability will be explored at GLOBE 2014, the next in the celebrated GLOBE Series of conferences on the business of the environment. Check out the just released Preliminary Conference Program here.