INTRODUCTION: TOWARDS A SUSTAINABLE AND INCLUSIVE GLOBAL ECONOMY
In business, financial success depends on a variety of factors: an innovative idea, a brave entrepreneur willing to take risks, a good business model, capital to realise the idea, the right pool of people to build a strong organisation and a willingness to work with partners. With the right operating environment, a level playing field for competition, good incentives and a bit of luck, success should follow.
In the past decades, we have come to realise that prosperity – for a country as well as for a company – depends on more than accumulating wealth. We also need to nurture and protect the natural environment, to develop the right intellectual resources, to create a strong and motivated workforce and support stable communities.
Yet, the world remains on an unsustainable path. Despite tremendous progress in the past century, challenges are mounting. Rapidly deteriorating environmental conditions, widening income gaps, severe resource constraints, economic uncertainty, political short-sightedness, widespread social upheaval and conflict; a set of difficult, interconnected problems that threaten to seriously undermine our social stability and prosperity. Humanity is on a deeply troubling path towards the
But there is hope: in the midst of all this, we are seeing encouraging signs of positive change. Human ingenuity and capacity for creativity and innovation is astonishing. Unexpected new technologies pop up every day. Radical new approaches to doing business, such as the circular and sharing models, are flourishing. We also see new forms of collaboration – at the international, national and local levels, and across sectors – that continually bring new ideas to the table.
These are truly exciting times. If we can make the right decisions and work together, we can change the path we are on and make a leap towards a new sustainable, inclusive, prosperous future for all. We have the capital, the knowledge and the
technology to create change – if we make the right choices, and if we make them now.
2015 is a critical year. In September, world leaders will meet to adopt new goals and targets for the sustainable development of the planet. In December, they will meet again aiming to reach a universal climate change agreement that will keep the world on a pathway to stay below 2 degrees Celsius – seeking carbon neutrality in the second half of this century. The next decades must be transformative, and business is a vital part of this transformation.
Since its launch, the Global Compact has worked towards the vision of a sustainable and inclusive global economy that delivers lasting benefits to people, communities and markets. To realise this vision, the Global Compact supports companies to:
1. Do business responsibly by aligning their strategies and operations with Ten Principles on human rights, labour, environment and anti-corruption; and
2. Take strategic actions to advance broader societal priorities, with an emphasis on collaboration and innovation.
FROM AN INSPIRATIONAL SPEECH TO THE WORLD’S LARGEST CORPORATE SUSTAINABILITY INITIATIVE:
THE UNITED NATIONS GLOBAL COMPACT
The United Nations Global Compact was launched at UN Headquarters in 2000. It was the result of a speech by then UN Secretary-General Kofi Annan at the World Economic Forum in 1999, proposing that business and the UN jointly initiate a “global compact of shared values and principles, which will give a human face to the global market”. The speech resonated with global business leaders in the audience, who were experiencing a crisis of legitimacy and pressure from all fronts to spread the benefits of globalisation. And thus from one phrase, a global movement was born.
What began as a small initiative, comprised of just 44 companies, is today the world’s largest leadership platform to advance corporate sustainability – calling on business everywhere to deliver long-term value in financial, social, environmental and ethical terms. Over 8,000 companies and 4,000 non-business organisations in 170 countries are signatories.
THE VISION OF THE GLOBAL COMPACT
Leveraging the unparalleled convening power and moral authority of the United Nations, the Global Compact helps companies to meet their sustainability commitment by providing a principle-based framework, guidance and best practices, action platforms and networking events, as well as fostering collaboration among participants.
By encouraging companies to operate responsibly and take actions that support society, the initiative works to ensure that business activity adds value not just to the bottom-line, but also to people, communities and the planet. The goal is to make sure that the benefits we reap today do not come at the expense
of the environment and to safeguard the well-being and prosperity of future generations.
In the next section of this report, we will introduce the Global Compact in greater detail.
In this report, launched on the occasion of the 15th anniversary of the Global Compact, we have set out to explore the changes we have seen since 2000 towards the Global Compact’s vision, and the impact that the Global Compact has had in catalysing change.
The objectives of the report are three-fold:
- To describe the main drivers, events and milestones that have shaped the emergence of the modern corporate sustainability movement (Part I).
- To examine the changes that we have seen towards the vision of the Global
Compact, and the role that the Global Compact has played in catalysing this
change (Part II).
- To look into the future and sketch out pathways for transformation towards the vision of a more sustainable and inclusive global economy in the next 15 years (Part III).
The report consists of three main parts.
PART I: THE HISTORICAL CONTEXT
We outline some of the main political, economic, social, environmental and cultural drivers, events and trends that have shaped the emergence and mainstreaming of corporate sustainability globally. This section provides the historical context behind the birth of the Global Compact.
PART II: ASSESSING CHANGE 2000-2015 AND THE ROLE OF THE UN GLOBAL COMPACT
In the second part of the report, we start with a baseline for the analysis by looking back and describing what the world looked like in the year 2000. To what extent were companies focused on what we now understand to be sustainability issues? What did the regulatory picture look like? Were financial markets concerned with non-financial risk? And what were our attitudes towards these issues?
Subsequently we present 16 findings related to changes across three dimensions: corporate practices, corporate operating environment and dominant worldviews. Each finding describes the change we have observed, and the role that the Global Compact has played in driving this change. Throughout, we present ‘Spotlights’ on different activities of the Global Compact ranging from issue engagement platforms to how the Global Compact works at the local level.
This part concludes by reflecting on the overall impact that the Global Compact
has had in the past 15 years.
PART III: PATHWAYS OF TRANSFORMATION
In the final section of the report, we look 15 years into the future and ask what the Global Compact should to do to strengthen impact towards its vision. We argue that the vision – a sustainable and inclusive economy – is radical, and to achieve it, radical transformation is needed.
We start by pointing out 15 trends that will shape the business landscape in the next 15 years. This provides the context for our recommendations: What are the pathways and enablers that can deliver more transformational change towards the vision in the next 15 years?
THE ASSESSMENT FRAMEWORK
This project sets out to assess whether the Global Compact has catalysed change towards its vision of a sustainable and inclusive global economy. As the global economy is a large and complex system comprising a myriad of actors, institutions, rules and mind-sets, it is assumed systemic change is needed in order to achieve the vision. To guide the assessment, we use a three-dimensional framework for assessing how transformation can be catalysed in complex systems. The three levels have been selected not only because they make up important dimensions of the global economy; they also correspond to the purpose and activities of the Global Compact.
LEVEL 1: CORPORATE PRACTICES
We explore how corporate practices have changed in the past 15 years, and to what extent companies are today implementing the Global Compact’s Ten Principles in their strategies, policies and practices.
LEVEL 2: CORPORATE OPERATING ENVIRONMENT
We look at changes in the external operating environment that influence corporate
conduct. In particular, the report focuses on key drivers such as regulation, finance and education, as well as important organisations such as the United Nations.
LEVEL 3: DOMINANT WORLDVIEW
We observe changes in the dominant worldview, including attitudes, values and beliefs, which shape our understanding of business and the economy.
THANK YOU TO ALL CONTRIBUTORS
This project has relied on the collaboration and support of hundreds of people around the world, and we would like to thank everyone who has contributed valuable insights and reflections. See list of acknowledgements in the back of this report.
THE ROLE OF THE UN GLOBAL COMPACT AND DNV GL
This report is a result of close collaboration between the United Nations Global Compact and DNV GL Group. Together, we have developed the scope and approach for the assessment. We have also jointly developed Part I: The historical context.
DNV GL has been responsible for conducting the assessment. The findings presented in Part II: The assessment of change between 2000 – 2015 represent the impartial and independent views of DNV GL based on the information we have collected.
The recommendations for the future in Part III have been developed by DNV GL but informed by discussion with the Global Compact office.