A NECESSARY GAMBLE
However, Annan maintains that the gamble has paid off, and today businesses are more than ever before in a position to promote sustainability.
The 7th Secretary-General United Nations,
Chair Kofi Annan Foundation,
Nobel Peace Prize Laureate
government regulation to do what’s right.”
In the late 1990s, the private sector and the UN were not on the best of terms. The UN system – and many governments – tended towards the opinion that large corporations were not doing enough to ensure that the benefits of globalization were enjoyed equally or fairly, while many in the private sector saw the UN as essentially a waste of prime Manhattan real estate.
But on the 38th floor of the UN building, new ideas and strategies were being conceived. The Secretary-General had a plan: if the UN was to achieve its mandate and deliver on the aspirations of world citizens, it needed to expand its network of partners and build a broader foundation for global development. Civil society organizations needed to be brought to the table, as did the private sector.
“If we were going to have the kind of impact I felt we should have – and we were not going to get all the money we needed to do that from governments – then we needed to expand our capacity through networking,” says Annan. It was at his urging that the UN engaged with business not only via the traditional UN agencies but also through the UN Global Compact, which was established as an independent organization with the support of the UN General Assembly.
The idea was controversial. It was not just the UN system that was suspicious of business. This was a period which saw anti-globalization demonstrations in many parts of the world, and in many civil society organizations – and some governments too – corporate power was seen as a rampant and unchecked force for social division and environmental degradation. The idea of engaging big business in agendas such
as human rights, environmental protection and labour rights was not “immediately appreciated by every ambassador” to the UN. However, it was part of his plan as Secretary-General to bring the UN closer to the people of the world, and he was firm
in his belief that the people were “out there” and not in the UN building in New York.
“It was a risk, but I was convinced it was the right thing to do. Businesses have a contribution to make. They often have the managerial skills, the technology and the resources to make a difference, and I felt we should try it,” he says.
In June 2000, the Global Compact was launched at the UN Headquarters with fewer than 50 signatory businesses. Fast forward 15 years and the Global Compact now boasts a membership of more than 8,000 businesses and 4,000 labour and civil society organizations. Participants have established more than 80 Local Networks and the Global Compact has launched a number of initiatives such as Principles for Responsible Investment and Caring for Climate that have added considerable corporate power to the sustainability agenda.
“But perhaps the biggest change over that period is how businesses have become accepted as stakeholders that can play a part in solving many of the world’s challenges,” says Annan.
“There is an openness today for government to accept that they cannot do everything by themselves. This has strengthened the development of public-private partnerships because I think peoples and governments have realized that we need all stakeholders to play their part. If we take a major issue like climate change, it is obvious that, at the end of the day, the real difference will be determined to a large extent by how corporations direct their research funding, the innovations they get involved with and how they help green the economy,” he says.
It was not always easy, however, and in some cases concerted efforts were required to convince business to engage with the Compact. This was the case with many of the large pharmaceutical companies, which had traditionally resisted lowering the price of anti-retroviral treatments for HIV/AIDS.
“We argued back and forth, but in the end they found a way of lowering the price. Today, many more people are on this medication, something that we could not possibly have achieved otherwise, so in the end they also made a difference,” says Annan.
He sees an ever-growing role for business to play in the effort to build a fairer and more peaceful world. “It’s an ongoing evolution,” as he puts it, and in some cases – perhaps climate change is the best example – businesses are really the driving force of positive change. “I hope we will have a binding agreement between governments by the end of this year, but at the end of the day governments have to build very much on what the companies are able to do. The decisions of governments will have to rely on the companies to deliver. I think, in fact, that forwardlooking companies need not wait for government regulation to do what’s right.”
INTERNATIONAL RELATIONS AT ALL LEVELS
Wary of regionalization, Kofi Annan sees a growing role for businesses and indeed individuals in shaping international relations.
“In my judgement, we live in a world where international relations are not something between governments alone. They are just as much something created by people and business as they travel the world. This develops understanding,” he says.
However, he also sees disturbing signs of protectionism, and of regions and nations closing in on themselves.
“Often, regional trade arrangements weaken the global system. We need to be conscious that in the long run no one can prosper at the expense of others,” says Annan.