Why Corporates Should Adopt UNGC Principles for CSR
The United Nations Global Compact (UNGC) has released 10 principles more than 15 years ago to drive sustainability. Since then, nearly 12,000 companies worldwide have recognised these principles as part of their Corporate Social Responsibility and have committed to adopting the sustainable and socially responsible policies that it calls for. The recommended policies by the UNGC revolve around the themes of human rights, labour, environment and anti-corruption.
The initiative has seen tremendous success over the years among the multinational conglomerates. UNGC’s extensive toolbox helps businesses share information, engage in open dialogue and take action to accelerate tangible progress toward a more sustainable world. This includes action platforms to establish partnerships and solve challenges, an online UN Business Action Hub and other resources, such as a reporting partnership with GRI.
The UNGC has clearly been an important international initiative for the global adoption of sustainable business practices and, arguably, a proof-point that commitment to clear and achievable objectives works. According to the UN Global Compact Performance Report by Ecovadis, organisations that have committed to the UNGC’s 10 principles perform significantly better on sustainability measures. In fact, the UNGC participants score, on average, 12 points higher compared to non-participants. The report also clarifies that small- and medium-sized businesses (29-999 employees) demonstrate better performance than larger organisations and act faster when addressing critical sustainability issues.
When looking at performance by theme, results by non-participants were strongest in labour and human rights and the environment, areas where there is strict regulation. However, they lag UNGC participants by about 10 points in each category. Ethics and sustainable procurement themes have the greatest gaps in performance between UNGC participants and non-participants, likely due to a lack of executive-level commitment to make investments in these areas.
Participation in the UNGC is not a guarantee of advanced CSR performance in and of itself. But there is a distinct correlation which concludes that companies that follow through on the commitments and use the resources available to them are better-equipped to make stronger progress.
The UNGC’s 10 principles are effective because these goals help companies hone in on the sustainability risks and considerations that should be top of mind for all businesses.
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The CSR Journal Team
