Businesses must compete for sustainability: UNGC’s Georg Kell

UN Global Compact head Georg Kell recently addressed leaders and investors at the Oslo Business for Peace Summit, urging them to take a strategic approach to sustainability and create a critical mass of responsible businesses worldwide.

georg kell ungc
United Nations Global Compact Executive Director Georg Kell told business leaders and investors at a business for peace summit in Oslo that corporate sustainability has shifted from a moral imperative to a material one. Image: Business for Peace Foundation

United Nations Global Compact (UNGC) executive director Georg Kell has urged businesses and investors everywhere to make corporate sustainability part of their business culture and operations, and to prioritise influencing those who still actively oppose change.

The UNGC head delivered the keynote speech at the Oslo Business for Peace Summit and Award 2014 in Norway on Thursday and stressed that “leaders can spur a race to the top, encouraging companies that are sitting on the fence and provoking the competitive spirit of peers”.

The ‘state of the union’ between business and society has reached a crossroads, he said, while noting that corporate sustainability has moved beyond a moral imperative to a material one. Kell emphasised that the impacts of market disturbances, social unrest, and ecological devastation on supply chain, revenues, and employee productivity are much clearer now for businesses – and there cannot be any more room for excuses of inaction.

While much has happened in the past 15 years, changes were only incremental and cannot be called transformative, Kell admitted. 

More companies need to take a sophisticated and comprehensive approach to integrating sustainability issues – starting from the board of directors, through the organisation and subsidiaries, and out into the supply chain

Georg Kell, UNGC executive director

The UN Global Compact – a voluntary corporate responsibility initiative that was launched in 2000 to uphold UN-backed universally accepted principles in the areas of human rightslabourenvironment and anti-corruption – only has 8,000 companies and 4,000 not-for-profit organisations as signatories. This is a small fraction compared to the remaining 80,000 or so multinationals and millions of smaller enterprises, Kell pointed out, underscoring the amount of work needed to build a critical mass for sustainability. 

Currently, there’s still a lack of economic incentives for do-gooders, and unless consumers favour sustainable businesses with the support of governments, “companies devoid of responsibility will keep winning contracts, cutting corners and seeking profits at any cost”, he noted. 

He also pointed out that short-termism in business and politics continue to hinder and paralyse progress in global climate and trade agreements, which causes an uphill battle towards long-term sustainability.

However, for companies who have already placed corporate sustainability at the heart of their businesses, he recommended they march ahead and focus urgently on three key business actions:

The first is to deepen their sustainability practices. He said: “More companies need to take a sophisticated and comprehensive approach to integrating sustainability issues – starting from the board of directors, through the organisation and subsidiaries, and out into the supply chain.”

Secondly, businesses should also address risks and challenges through collaboration and thirdly, take proactive roles instead of being defensive when dealing with public policies, he stressed.

He further recommended that companies should lobby with their governments to enact policies that support sustainable business, citing examples such as setting ways to find the true cost of carbon emissions, as well as enablling transparent public procurement. 

Kell said: “Sustainability is moving up the agenda – away from the public relations realm to a strategic one handled at the highest levels of the company.” 

The Oslo Business for Peace Summit and Award was organised by the Business for Peace Foundation, which aims to promote a business case for socially responsible and ethical initiatives while in pursuit of economic growth.

Read the full speech here.

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