As a deeper understanding of sustainability issues gained momentum around the world, companies of all sectors were stepping up efforts to build environmental and social considerations into management strategies and policies. But much remains to be done to fully realize corporate sustainability and translate commitments into tangible action, correspondents were told at a Headquarters press conference today.
That was one of the central findings of the 2011 Global Compact Annual Implementation Survey, the most comprehensive global survey on business policies and actions to advance sustainability. Completed anonymously by more than 1,300 companies participating in the United Nations initiative to advance responsible business practices, the Survey’s results were presented by Georg Kell, Executive Director of the United Nations Global Compact, who said the Survey’s other findings included:
- 2011 was a year of unprecedented growth for the Global Compact, with 1,861 companies joining the initiative — an increase of 54 per cent over 2010;
- Nearly half (49 per cent) of all companies reported that their sustainability commitments were developed or evaluated at the management board level;
- Only 9 per cent of all companies reported that their Government lobbying activities were aligned with their sustainability principles;
- Corporate disclosure on sustainability issues was on the rise;
- Among the four issue areas covered by the Global Compact principles, companies were taking action on the environment and labour standards at the highest rates;
- While environmental risk assessments were becoming a standard feature of sustainability management, less than a quarter of all companies on average reported conducting risk assessments on human rights, labour issues or on anti-corruption;
- While 63 per cent of respondents said their companies considered supplier adherence to sustainability principles, most were only taking limited action to support and incentivize such adherence; and
- A little more than 28 per cent of all respondents ranked their companies’ sustainability performance as advanced, most of those being larger businesses.
Noting that business efforts to advance corporate responsibility would also be in the spotlight at this June’s United Nations Conference on Sustainable Development — also known as Rio+20 — Mr Kell described the findings as “quite important” in the run up to Rio, adding: “The business case for corporate sustainability is gaining global recognition. But, this is the time for business leaders to follow words with action and ensure that responsible practice becomes part of the corporate DNA.”
Together with several partners, the Global Compact would be hosting the Rio+20 Corporate Sustainability Forum, a gathering of more than 2,000 executives and leaders from Government, civil society and the United Nations system focusing on the role of business in advancing sustainable development through innovation and collaboration, he said.
In response to a correspondent’s question who asked for the latest total number of companies now signed up to the Global Compact and how that was broken down vis-à-vis the industrialized world, BRICS [Brazil, Russian Federation, India, China and South Africa] and the developing world, Mr Kell said the exact figure as of today was now 6,985, and he expected the 7,000 mark to be reached soon. He said he was proud to state that those 7,000 companies were equally distributed around the world — coming from some 140 countries and representing all regions, distributed roughly evenly between the developed and the developing world. Of those, more than 60 per cent were small and medium-sized companies. Geographically, there was still a stronger European representation, although the emerging markets were rapidly closing that gap and catching up quickly.
To another question, Mr Kell explained that the Global Compact was a voluntary initiative and, as such, it never substituted for what Governments did or did not do. It could only help to accelerate good behaviour and provide transparency and disclosure on what was going on with regard to environmental, social and governance issues, as well as facilitate dialogue where it could, but the Global Compact had neither the mandate nor the capacity to act as judge or broker over internal national or Government disputes with companies.
Asked what percentage of companies reported every year, as required, he said there had been an improvement from the initial figure of about 50 per cent when the Compact started, and it now stood at 70 per cent. He attributed the increase to the fact that many companies were increasingly coming to realize the value of disclosure. Also, investors were closely examining their disclosures, because they also now understand that a company that had a proactive policy and could prove that it was environmentally ahead of the curve, on average had a better long-term outlook.