Taking root: The global spread of sustainability

In the past 15 years, sustainability has penetrated deeper into markets and sectors all over the world. This is shown by the growth in the number of Global Compact signatories, as well as
their relative economic size and coverage of the global workforce. Corporate sustainability has grown to become a broad global movement.

GROWTH AND PARTICIPATION

The Global Compact works to mainstream the ten principles in business strategy and operations around the world. That entails having both a global presence, and penetrating all sectors.

Since the launch of the Global Compact in 2000, business participation has grown from 44 to more than 8,300, and from a representation of 13 countries to as many as 156. Business presence in the Global Compact remains strongest in Europe, which has both the highest number of participants (52 per cent of total) and countries represented. The largest increase in the number of countries with Global Compact participants has been in Africa (from 1 to 32) and the largest increase in the number of participants has been in Latin America.

Figure 08 shows the growth in business participants per sector. While there has been growth across the board, the industrial sector has grown the most, including Construction & Materials and Industrial Goods & Services. Telecommunication
is the industry in which the Global Compact has seen the lowest increase in participants.


SIGNIFICANT ECONOMIC PLAYERS ARE MOBILISING

Penetration into different geographies and sectors is important for global adoption of the principles. However, equally important is engagement with influential companies of a significant size which can inspire other businesses. An overview of participants in the Global Compact shows an increasing number of influential companies are taking part. Figure 09 illustrates Global Compact presence in the Fortune Global 500 list, the world’s largest 500 companies. By the end of 2014, 25 per cent of the 2014 Fortune Global 500 companies had joined the Global Compact. These companies represent 32 per cent of the total revenue of Fortune Global 500 companies. Forty per cent of the Financial Times 500 companies are also Global Compact participants.

Comparing the profit (including wages paid out) of Global Compact participants on the Fortune Global 500 list for 2014 with the current global gross domestic product of around 77 trillion USD4 shows that the economic footprint of Global Compact signatories in the Fortune Global 500 has grown to become 1.8 per cent of the global economy.


PERCENTAGE OF THE GLOBAL WORKFORCE

The number of people employed by Global Compact business participants had
grown from 3.3 million in 2000 to 58 million as of March 2015 - a significant
growth. To put this in global perspective, the percentage of the global private
sector workforce employed by Global Compact participants increased from
almost zero in 2000 to around 3.7 per cent in 2013.5


SMALL SHARE OF PUBLICLY LISTED COMPANIES

There has been a more limited rise when it comes to membership of the Global
Compact among the world’s publicly listed companies. Out of a total of 46,737
publicly listed companies in 20126, only two per cent were Global Compact
signatories. Since 2012 the number of publicly listed companies in the Global
Compact had grown from 935 to 1,101 as of May 2015.

In 2014, 18,000 companies with a total of USD 35 billion in market capitalisation
were traded on 16 Partner Exchanges to the Sustainable Stock Exchanges
initiative – a sister initiative of the Global Compact.

THE ROLE OF UN GLOBAL COMPACT:

MOBILISING BUSINESS FOR SUSTAINABILITY

As sustainability is increasingly penetrating markets globally, what has been the role of the Global Compact in catalysing change?

In the past 15 years, the Global Compact has undoubtedly played a significant role in spreading the practices of corporate sustainability around the world. Since its inception, the focus on outreach, knowledge-sharing and dialogue, as well as the launch of Local Networks, has encouraged companies and other stakeholders to join the initiative.


WIDENING THE REACH OF SUSTAINABILITY

Today, the Global Compact is the world’s largest corporate sustainability initiative, and the only one which is truly global in nature. It has become a successful vehicle for mobilising businesses of all sizes, sectors and geographies, and for encouraging companies to undertake a sustainability journey. As a result, the number of participants and the number of influential players across different markets and sectors has grown steadily.

In 2008, the Global Compact strengthened its accountability mechanism and began removing participants that had not fulfilled reporting commitments. Since then, 5,579 companies have been ‘delisted’. In addition, 798 companies have requested withdrawal.

Considering that the objective is to mainstream the principles in business practices everywhere, there is still a long way to go. Although the number of participants is gradually increasing, it still represents a marginal fraction of global economic activity. The vast majority of companies worldwide has yet to commit to the principles of the Global Compact.


GOING GLOBAL BY GOING LOCAL

Importantly, through the launch of more than 85 Local Networks around the world (see page 151) the Global Compact has played a key role in spreading responsible business practices around the world. A unique feature of the Global Compact, the Local Networks play an important role in rooting the initiative within different national, cultural and linguistic contexts, and supporting companies in tackling local sustainability challenges. In some cases, the Global Compact has been a first mover bringing the corporate sustainability movement to life, most notably in countries like China and India.

“This is only the beginning. Today, some companies are new to the game, but they are still eager to advance. In the transition to a low carbon economy and sustainable society, this is what’s going to happen; not everybody will go at the same pace. The Global Compact has been a good vehicle for companies to advance at their own speed.” 
JUAN RAMON SILVA FERRADA SUSTAINABILITY SENIOR EXECUTIVE DIRECTOR, ACCIONA