This article was first published in the November 2012 International edition of Accounting and Business magazine.
In July 2012, following the Rio+20 United Nations Conference on Sustainable Development, ACCA announced that it has become a member of the United Nations Global Compact (UNGC).
What is the Global Compact and what are its objectives?
The UNGC was launched in July 2000 with the aim of promoting the development, implementation and disclosure of responsible and sustainable corporate policies and practices. It is defined as ‘a strategic policy initiative for businesses that are committed to aligning their operations and strategies with 10 universally accepted principles in the areas of human rights, labour, environment and anti-corruption’.
The 10 principles are summarised in the box opposite. Signatories make a commitment to incorporate the 10 principles into their operations. Business participants are required to communicate the steps taken to do this via an annual Communication on Progress (COP), a public disclosure to stakeholders (eg investors, consumers, civil society and governments).
As a non-business participant, ACCA is not required to issue a COP but is encouraged to do so by UNGC as the requirement serves a number of important purposes, including advancing transparency and accountability; driving continuous performance improvement; safeguarding the integrity of the UNGC and the UN; and helping to build a growing repository of corporate practices to promote dialogue and learning.
Who are the other members?
Currently there is a formidable array of more than 8,700 corporate participants and other stakeholders from more than 130 countries, making it the largest voluntary corporate responsibility initiative in the world. Participants include leading international companies, service providers, partnerships and professional bodies, including many key ACCA partners.
Why has ACCA decided to become a member?
By signing up, ACCA is demonstrating an active commitment to upholding its core values, as well as underlining our longstanding support for sustainable business. It brings ACCA into line with many leading companies and organisations, and increases the opportunities for more partnerships with both private and public sector organisations.
Membership fits well with our historical support for initiatives such as the Global Reporting Initiative, the UNCTAD/UNGC Sustainable Stock Exchanges programmes and the agenda of the International Integrated Reporting Council.
ACCA chief executive Helen Brand says: ‘Becoming a member of the UN Global Compact is a logical step for ACCA. The objectives of the Global Compact closely match our own corporate values. Our commitment to ethics and professionalism, married to our long-term support for the wider sustainability agenda and our numerous partnerships in the corporate responsibility arena, together demonstrate our willingness to both serve the public interest and contribute to the continuous improvement of the way in which business is conducted in all sectors of the global economy.’
What does membership mean for ACCA in terms of governance, monitoring and reporting?
In terms of a corporate commitment, ACCA will be expected to:
- make the Global Compact and its principles an integral part of business strategy, day-to-day operations and organisational culture
- incorporate the Global Compact and its principles into the decision-making processes of the highest-level governance body (ie Council and the executive team)
- contribute to broad development objectives (including the Millennium Development Goals) through partnerships and
- advance the Global Compact and the case for responsible business practices through advocacy and active outreach to peers, partners, clients, consumers and the public.
Why should other organisations consider joining?
Private sector organisations and public sector bodies will have different motivations for subscribing to the objectives of the Global Compact. These will include:
- direct association with the UN from a pure brand perspective
- demonstration of a corporate responsibility leadership position at the sector/national level
- accessing a UN-driven enabler of closer relationships with governments and non-governmental organisations
- enhanced feed-through to users of sustainability/integrated reporting exercises
- evidencing a strong commitment to corporate governance – reassurance for the growing body of environmental, social and governance (ESG)-driven investors.
The benefits also include:
- adopting an established and globally recognised policy framework for the development, implementation and disclosure of ESG policies and practices
- sharing best and emerging practices to advance practical solutions and strategies to common challenge
- advancing sustainability solutions in partnership with a range of stakeholders, including UN agencies, governments, civil society, labour and other non-business interests
- linking business units and subsidiaries across the value chain with the Global Compact’s Local Networks around the world – many in developing and emerging markets
- accessing the UN’s extensive knowledge of and experience with sustainability and development issues
- utilising UNGC management tools and resources, and the opportunity to engage in specialised workstreams in the ESG realms.
What impact has the compact had and where is it heading next?
NGC membership hit 8,700 in 2012 and executive director George Kell has ambitions to reach 20,000 by 2020. Impressive as these numbers seem, it is worth bearing in mind the conclusions of the UNGC Corporate Sustainability Forum, held in Rio directly before the Rio+20 conference, that ‘despite progress, corporate sustainability has not penetrated the majority of companies around the world, nor have we seen the depth of action needed to address the most pressing challenges. To reach scale, economic incentive structures must be realigned so that sustainability is valued and profitable.’
ACCA believes that, via the embedding of our corporate values, through our investment in a wide-ranging corporate social responsibility programme and through our programmes designed to allow employees and others to ‘speak up’, we are well placed to play our part in taking the UNGC agenda forward.
ACCA believes that the basic premise of the UNGC is sound and looks forward to playing a full role in assisting in the achievement of its core objectives. At the same time we also hope to benefit from the shared learning and development resources and possibilities which lie at the heart of the UNGC process.
GLOBAL COMPACT: THE 10 PRINCIPLES
1 Businesses should support and respect the protection of internationally proclaimed human rights and
2 make sure that they are not complicit in human rights abuses
3 Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining,
4 the elimination of all forms of forced and compulsory labour,
5 the effective abolition of child labour and
6 the elimination of discrimination in respect of employment and occupation
7 Businesses should support a precautionary approach to environmental challenges,
8 undertake initiatives to promote greater environmental responsibility and
9 encourage the development and diffusion of environmentally friendly technologies
10 Businesses should work against corruption in all its forms, including extortion and bribery
Roger Adams is director – special assignments and Gordon Hewitt is sustainability adviser, ACCA