On September 19-20, the UN Global Compact Leaders Summit will bring together chief executives of companies that are committed to sustainable development and corporate citizenship, a concept that describes the citizenship role of corporations in a global economy. In the words of Secretary-General Ban-Ki Moon, the Summit will “outline a path for business to contribute to global priorities and the public good”.
The UN initiative, currently the largest global corporate social responsibility (CSR) initiative in the world, comprises over 10,000 participants from corporations, civil society and academia. The entry-barrier for corporations to join the Compact is low: The CEO, endorsed by the Board, sends a letter of commitment to the Secretary-General of the United Nations that expresses support of the Compact’s ten principles in the areas of human rights, labour, environment and anti-corruption. This commitment explicitly implies making “the Compact and its principles an integral part of business strategy, day-to-day operations and organizational culture” (www.unglobalcompact.org).
To date no good tools exist that would allow assessing how far the corporate commitment has penetrated corporate practice. Yet tools that focus on the alignment of core business processes are critical for advancing the global sustainability agenda; the design of organizational structures and procedures is a precondition for turning a principled commitment into daily business practice. Only if incentive structures, hiring and promotion processes, training schedules, complaints procedures and the corporate engagement in stakeholder dialogues acknowledge the value of the UNGC principles, are corporations able to implement their commitment systematically. Assessing the degree of organizational embeddedness of Corporate Citizenship is therefore beneficial for corporations and other stakeholders:
- It enables companies to better manage risks: Public commitments to sustainability put corporations in the spotlight. An assessment of organizational structures and procedures may prevent disaster by identifying and addressing gaps in the system before issues emerge. Corporations today must respond to the ever-increasing expectations of a large number of highly heterogeneous stakeholders. Referring to an assessment that outlines how the corporation is aligning its business processes with its commitments enables corporations to show and tell how their commitment is affecting their business.
- It enables corporate stakeholders to differentiate: An assessment of organizational structures and procedures allows corporate stakeholders to look behind the façade of company reports and differentiate companies that are advanced in the implementation phase from those that are mere beginners. The UNGC has been criticized for providing a blue/greenwashing opportunity for companies and its legitimacy will eventually be questioned if such allegations remain unaddressed. Shedding light on the actual state of implementation could clarify the situation and provide consumers, investors, and critical civil society organizations with the information they need for decision-making.
Assessments of core business structures re-focus the broad CSR discussion to the core issue: revised business practices are the foundation for creating a “new architecture on sustainability”, the declared objective of the 2013 UNGC Leaders Summit.
By Dorothée Baumann-Pauly.
Dr Dorothée Baumann-Pauly is a business ethics scholar and human rights advocate. She received her PhD in Economics from the University of Zürich. In her scholarly work she links the interdisciplinary academic discourse on global governance with the practical implementation challenges of corporations as political actors. She currently teaches at HEC Lausanne and works with the Center on Business and Human Rights at Stern School of Business, New York University.
She is the author of Managing Corporate Legitimacy, which provides practical and detailed guidance for implementing and embedding Corporate Citizenship (CC) in organizations. Managing Corporate Legitimacy is out now. For more details, please go to our website where you can order your copy.