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University of Edinburgh

The United Nations and Transnational Corporations: The Politics of Organizing for Corporate Social Responsibility

Andreas Rasche Warwick Business School, University of Warwick

19 March 2012

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Agenda

1 Looking into History: From Code to Compact

2 The UN Global Compact: Retrospect and Prospect

3 Looking into the Future: Beyond Rio+20

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Davos, World Economic Forum, 31 January 1999

“I propose that you, the business leaders, and we, the United Nations, initiate a global compact of shared values and principles, which will give a human face to the global market.”

Former UN Secretary-General Kofi Annan © WEF

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UN-Business Relations: From Code to Compact

70s 80s 90s 2000

Group of Eminent Persons (GEP)

(1972-1974)

UN Center on TNCs

(1975-1992)

Final Rejection of Code (1992)

UN Global Compact

(2000 onwards)

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The UN Global Compact - An Initiative Based on Partnership

Addressing Governance

Gaps

&

Creating Sustainable

Markets

Profit &

Growth

Business

Deepening Interdependencies

United Nations

Peace &

Poverty Reduction

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Agenda

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2 The UN Global Compact: Retrospect and Prospect

3 Looking into the Future: Beyond Rio+20

Looking into History: From Code to Compact

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‘A Moral Compass’ – The Compact’s Ten Principles

Business should support and respect the protection of international human rights; and

make sure they are not complicit in human rights abuses. Human Rights

Business should uphold the freedom of association and the effective recognition of the right to collective bargaining;

the elimination of all forms of forced and compulsory labor;

the effective abolition of child labor;

the elimination of discrimination in respect of employment and occupation.

Labour Rights

Business should support a precautionary approach to environmental challenges;

undertake initiatives to promote greater environmental responsibility; and

encourage the development and diffusion of environmentally friendly technologies.

Environ-ment

Business should work against all forms of corruption, including extortion and bribery. Anti-Corruption

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•  over 6900 business participants in over 135 countries •  3100 non-business participants – NGOs, academia, and labour •  mix of large TNCs and SMEs (50% of participants are SMEs)

The Global Compact in 2012 – Some Key Facts

Participants

•  requirement to file annual report on implementation progress •  delisted participants (until March 2012): over 3100 •  reporting not standardized (GRI recommended)

Accountability

•  clusters of participants interacting at the national level •  established or emerging networks in over 90 countries •  good presence in developing/transition economies

Local Networks

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Multi-Level Governance in the Context of the Global Compact

Emerging Network

Local Network

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UN Global Compact – Participant Growth

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What Has Influenced the Continued Growth of the Initiative?

Political Support

•  Several GA resolutions as political back up

•  Leadership support by Kofi Annan and Ban Ki-Moon

•  Secured access to UN system

Governance Structure

•  Governance is network-based and multi-stakeholder

•  Participant ownership vital for success

•  Enabled responsive management

Global-Local Link

•  Loosely coupled networks as “contextualizers”

•  Local networks brought in SMEs and globalized debate

•  Networks gave access to BRICs

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The Debate Around the UN Global Compact

•  Principles miss precision and hence offer no clear guidance for implementation

Vague Principles

•  Absence of independent monitoring and verification mechanisms

Lack of Accountability

•  Global Compact allows businesses to capture UN agenda – privatization of UN

UN Capture

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Agenda

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Looking into the Future: Rio+20 and Beyond 3

Looking into History: From Code to Compact

The UN Global Compact: Retrospect and Prospect

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Which Challenges Remain Ahead to Further Develop the Global Compact?

Promote Balance

•  Balance quantitative (participant) and qualitative (impact) growth

•  Provide assistance to non-OECD SMEs regarding COP reporting

•  Strengthen role of non-business participants

Build Links

•  Growing corporate responsibility “infrastructure” (e.g. ISO 26000)

•  Better link existing initiatives and specify value propositions

•  Link along: types, regions, and sectors to reduce ambiguity

Differentiate

•  Acknowledge leaders, let laggards catch up, and punish free riders

•  Differentiation must acknowledge firm context (e.g. size and regions)

•  Use differentiation to build “participant clusters”

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Rio+20 as a Chance to Deepen UN-Business Relations

How does the UN involve the private sector in achieving sustainable development?

1.  Solutions based on international law are unlikely to emerge in the near future due to a lack of political support.

2.  Strong growth of bilateral UN-business partnerships in the context of MDGs (e.g., between UNICEF and businesses).

3.  The Global Compact will play a vital role in giving UN-business relations ‘a face’ and providing a platform for companies to learn how to partner.