PRESS CONFERENCE ON GLOBAL COMPACT LEADERS SUMMIT SET FOR GENEVA, 5-6 JULY

 

The United Nations Global Compact’s upcoming leaders’ summit would drive home the message that adhering to its core human rights, labour, environment and anti-corruption issueswould better position corporations and organizations in navigating the challenges of globalization, Georg Kell, the Compact’s Executive Director, said at a Headquarters press conference this afternoon.

Briefing correspondents on the summit, to be held on 5 and 6 July at Geneva’s Palais des Nations, he said it would be the largest and most significant event on the topic of leadership and corporate citizenship.  Chaired by United Nations Secretary-General Ban Ki-moon and featuring an international roster of business leaders, Government ministers and civil society leaders, it would focus on building the markets of tomorrow.  Some 1,000 participants were expected.

He said that, over the last three to four years, some positive important trends had helped the Global Compact to grow significantly since its launch in 2000, when it had had some 47 participants.  Today, it had more than 4,000 participants from more than 120 countries, organized increasingly in local networks.  Many corporations had initially joined the Compact because “getting it wrong” had been seen as costly.  Today, the important thing was creating value and proactive risk management.

Turning to the UN Global Compact Annual Review, the first ever substantive survey of the Compact’s implementation, he noted that, while a majority of respondents had human rights, labour, environment and anti-corruption policies in place, there was much room for improvement in such areas as conducting human rights impact and risk assessments, applying labour standards throughout supply chains, using environmental management systems and reporting on corruption.  Only 16 per cent of respondents had undertaken human rights assessments and just 2 per cent had actually recorded instances of corruption.  At the upcoming summit, the Compact would seek to create the firm expectation that involving subsidiaries and supply-chain management on the core issue areas was as important as establishing the right policy at headquarters.

He said the summit would also focus on the Compact’s climate change leadership platform, a global initiative on education and a host of other sectoral and regional initiatives, he said.  “Expectations for the summit meeting are also that Governments increasingly appreciate what voluntary initiatives can contribute,” he said, stressing, however, that they were no substitute for Governments.  They complemented Government action by reinforcing positive trends and accelerating good performance.

The survey, embargoed until 2 July, took stock of the partnership agenda and how the United Nations and its various partners worked together, he said.  Companies were increasingly forming cross-sectoral partnerships and finding the business case in a proactive approach to the issues, and the Organization was increasingly in a position to be a partner in implementing the Compact.

Also attending the press conference was Anthony Ling, Managing Director of Goldman Sachs International, who described an analysis of the energy industry undertaken in 2003 by that corporation and McKinsey and Co. in response to an invitation by the Compact.  A dedicated team had produced reports on the energy, steel and mining, food and beverage, and pharmaceutical industries and initial signs of the research were “encouraging”.

Asked how the Compact’s “positive news” would help companies without big infrastructures, Mr. Kell noted that many issues could only be tackled through a collaborative effort.  The summit had been orchestrated to allow for an exchange of experiences, and it would have a special focus on human rights, education and financial markets.

Mr. Ling added that it was not true that the largest organizations were the most successful.  Companies with a stronger ranking in terms of the ESG (environment, social, governance) matrix had outperformed their bigger peers.

How successful had the Compact been in involving United States companies? a correspondent asked.

Mr. Kell replied that the situation had improved vastly.  Recent newcomers to the Compact included Coca Cola and Microsoft, but United States corporations were still obsessed with legal liabilities.  However, the introduction of integrity measures, including regular disclosure of performance changes, had greatly boosted the Compact’s “brand” and improved its standing, especially in the United States.

Asked whether the growth in new companies since 2000 did not represent a mere “drop in the ocean”, he agreed that there was a long way to go in terms of involving more corporations.  However, the Compact’s participants were geographically well spread, representing the global economy.  Its ultimate goal was to make global markets more stable and inclusive by underpinning them with environmental, social and Government pillars.  It also aimed to promote the Compact’s 10 human rights, labour, environment and anti-corruption principles.  The Compact sought to give globalization more stability.

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For information media • not an official record