UN Global Compact’s scientific contributions

This publication presents examples of how companies, investors and Global Compact Local Networks have used the Guidance as a tool to align their policies, to engage with investee companies and to advance the implementation of responsible business practices in difficult operating environments around the world. It has been developed with the hope of inspiring other companies, investors and Global Compact Local Networks to take action for peace. The report is a joint effort of the UN Global Compact, PRI and KPMG, the global network of accounting firms. An advisory committee of experts reviewed the examples and provided advice on the development of the case studies.Recognizing that sharing experience enables companies to lead by example, this resource is designed to provide readers with practical ideas for understanding and managing some of the issues that can arise when operating in conflict-affected and high-risk areas, or engaging with companies in such contexts. This resource is also intended to stimulate dialogue with other stakeholders that are affected by corporate policies and operations and with actors that have expertise and influence in this agenda, to identify practical dilemmas.

The promulgation of regulatory guidance on the importance of an effective anti-corruption compliance programme has been steady and significant over the last few years, and has garnered media attention given the size of the fines some enterprises have paid. That media attention has, in turn, led to increased focus from management, board members and investors alike on corruption-related risk's impact on stock value, company reputation, employee morale, and the people of the impacted countries. Effective assessment and mitigation of an enterprise's corruption risk has been an element of many recent settlements with regulatory agencies. It is highlighted in both the OECD's Good Practice Guidance on Internal Controls, Ethics and Compliance, and the Guidance issued to accompany the UK Bribery Act. It is also a critical element of the UN Convention against Corruption, including the 10th Principle of the UN Global Compact.The need for risk assessment and the approach outlined in this document is consistent with the “assess” step of the UN Global Compact Management Model framework. This step allows an enterprise to identify risks that can affect its performance and reputation from nonalignment with the 10 Principles of the Global Compact.Increasingly, companies across the world receive more lenient treatment in bribery prosecutions as an affirmative defense for the quality of their anti-corruption programmes in the event of employee misconduct. One key component of an effective programme is the assessment of the anti-corruption risk facing a given enterprise. Though much of the available regulatory guidance is instructive and highlights the importance of effective risk assessment, it fails to provide a “how-to” of such an assessment.

In an interconnected world where the private sector, Governments and society have differentiated responsibilities but a shared interest in stability and prosperity, peace and development - business can be a powerful agent of change.Conducting responsible business operations in all areas of the world and taking action to advance peace is in everyone's interest, including business. Conflict and instability not only impact people and the environment; they also pose risk to all parts of the business sector. Responsible behaviour requires proactive action to ensure business not only does no harm, but, where possible, contributes to development and assists society to overcome challenges to stability.As business leaders, we welcome the recommendations outlined in the Guidance on Responsible Business in Conflict-Affected and High-Risk Areas. This voluntary guidance joins a range of tools and initiatives to support companies in developing policies and implementing responsible business practices aligned with the UN Global Compact Ten Principles in conflict-affected/high-risk areas - with a view to advancing peace.We recognize that special attention needs to be given when operating in high-risk areas to ensure that the rights of stakeholders and vulnerable groups are respected and supported. Further, we believe that conflict-sensitive supply-chain management, responsible labour practices, combating corruption, responsible water management and caring for the climate all operate as foundational pillars of peace and stability. We are committed to play a constructive role in fostering peace, stability and development.

This series of case studies focuses on the practical application of the United Nations Global Compact's human rights principles (1 and 2) through concrete examples from business. The cases explore the steps businesses are taking to support and respect human rights in their operations, business relationships and wider sphere of influence. The case studies feature examples that: (1) demonstrate the relevance of human rights issues for businesses across sectors and regions; (2) build the business case for incorporating human rights in business; (3) inspire businesses to improve their performance on human rights issues; and (4) explain how businesses have successfully accomplished this already, to facilitate the dissemination of good practices. The Embedding Human Rights in Business Practice series is directed to all stakeholders engaged in human rights and business, including: businesses (both multinational companies and small or medium enterprises), investors, governments, Global Compact Local Networks (GCLNs), academics and other UN and civil society organizations engaged with companies on human rights issues.

The Post-2015 Business Engagement Architecture illustrates the main building blocks necessary to enhance corporate sustainability as an effective contribution to sustainable development, creating value for both business and society. Each of these building blocks must be further strengthened and connected through a comprehensive and collective effort if they are to help take corporate sustainability to scale and turn business into a truly transformative force in the Post-2015 era. Individual companies, corporate sustainability organizations, Governments, investors, business schools, civil society, labour and consumers all have a role to play in scaling up business action, and should be able to identify those areas in which they need to do more.

This Supplementary Guidance provides a set of Reporting Elements (Basic and Advanced), which can help a business to: (a) Identify components of a basic human rights programme as well as the features of an advanced human rights programme, which all businesses should aspire to; (b) Be more transparent in reporting on the assessment of human rights risks and opportunities and procedures for preventing and addressing adverse impacts; (c) Know how and what to disclose by providing references to indicators from other initiatives, human rights tools and guidance materials; (d) Access a clear and easy-to-use format to structure reporting of human rights policies, procedures and activities in the annual COP.The Global Compact invites businesses to use this Supplementary Guidance when reporting on human rights issues within their annual COP. The key point is to improve the quality of disclosure on the practical actions (i.e. policies, processes, initiatives, activities undertaken, outcomes achieved or expected) that the business has undertaken in implementing the 1st and 2nd Principles.

More than 57 million children of primary school age are still out of school. Fifty per cent reside in conflict-affected areas. Over 69 million adolescents are not attending primary or secondary school. For the past three years, these numbers have hardly decreased, and in some countries, progress has stalled or reversed. Children, youth and adults still confront discrimination to access quality learning opportunities despite international affirmation of the right to education.Even when children and youth go to school, often they are not learning. Two hundred and fifty million children of primary school age cannot read or write; some (130 million of them) even after spending four years in school. About 774 million adults - two-thirds of whom are women - cannot read or write.The situation is worse in conflict-affected countries. Many children have their education interrupted by conflict and emergency and never return to school. Lack of educational opportunities undermine broader economic development and social stability.There is tremendous potential for the private sector to contribute to improving education around the world. If we fail to act, we face deepening inequalities and the untapped potential of millions to drive our collective future. The population of 15 to 24 year olds is now over one billion in the developing world, roughly one-sixth of the world's population. Confronted with limited investments in quality education, we face a reality of the largest population in history without the skills, knowledge or attitudes to engage positively in society.As of now, business investments in education tend to be small, short-term and uncoordinated. And they often are directed towards children and youth in middle-income societies with few investments benefitting the most marginalized. Education is the greatest equalizer - it offers all children, youth and adults opportunities for success.Business has been able to drive progress in other areas, like health. Experience shows that business has the potential for transformational impact in education and can be an effective partner in improving education systems and learning worldwide. While some businesses already lead the way in effective engagement, this framework can help other companies advance global education goals.

With increasing and encouraging regularity, corporate sustainability is appearing on the radars and agendas of companies around the world. Corporate leaders recognize the growing relevance and urgency of global environmental, social and economic challenges. They see how sustainability issues affect the bottom line and are looking beyond traditional business and financial factors to map out their priorities and strategies.For these companies, corporate sustainability has immediate material relevance. In their own backyards, at their site locations and through their extensive supply chains, they increasingly face the effects of extreme poverty, unacceptable working conditions, environmental degradation, systemic corruption or eruptions of violence. In this environment, companies can choose one of two routes: uphold high standards or try to ignore the situation, muddle through and risk costly damage to growth prospects, long-term investments and reputation.Turning a blind eye to sustainability issues is a ticking time bomb, and hiding missteps - no matter how deep down the supply chain - is no longer an option. Technology advances have enabled rapid access to information and accelerated the spread of social networks. These developments challenge the traditional forms of authority and make transparency a necessary tool for management. Earning a “licence to operate” increasingly requires public legitimacy and proactive societal engagement.At the same time, the benefits and opportunities of embracing corporate responsibility are clear and appealing. The upside includes increased trust and market value, growth from “green” innovations and “base of the pyramid” business ventures, and interest from an investment community that - more and more by the day - considers sustainability factors, such as sound environmental stewardship, social responsibility and good governance, in calculating a company's long-term value.

The United Nations Global Compact is the world's largest voluntary corporate citizenship initiative. Companies join the Global Compact because they share the conviction that business practices rooted in universal principles contribute to a more stable and inclusive global market and help build prosperous and thriving societies.With more than 6000 participating companies from 135 countries, as well as 2300 nonbusiness participants (as of September 2010), the Global Compact has emerged as a truly global initiative with a strong presence in both North and South. The initiative also enjoys the backing of the United Nations’ member states, as expressed in several General Assembly resolutions recognizing and encouraging the Global Compact's work.A unique feature of the Global Compact is that participation not only commits the company as a whole, but specifically its leadership. The personal involvement of a top executive is an important signal to employees and other stakeholders that the company's corporate citizenship engagement is a strategic and operational priority. A top-down commitment can thus have tremendous influence on the quality of Global Compact implementation.

Derived from the United Nations Convention against Corruption, the Global Compact 10th Principle urges businesses to fight against corruption: “Businesses should work against corruption in all its forms, including extortion and bribery”.Corruption negatively impacts social and economic development as well as environmental sustainability. Ineffective implementation of anti-corruption policies contributes to illegal logging, water and air pollution, exploitation of mineral resources, and unsustainable bio-fuel use. Corruption undermines the gains and positive effects generated by sustainable corporate practices.To combat this problem, the Global Compact promotes the implementation of rigorous anti-corruption measures though organization change at the company level and collective action at the country level. First, companies are asked to integrate anti-corruption and compliance measures into their business strategies and operations. Companies develop their own code of conduct, including the implementation of a zero tolerance policy and a range of rules and regulations concerning gifts, political contributions, charities and travel. To apply these policies, companies implement a range of actions, including the establishment of anonymous hotlines, employee training, supply chain management, risk assessment and disciplinary measures. Second, companies are asked to take part in collective action, multi-stakeholder dialogue, and integrity or compliance pacts with industry peers. Global Compact business participants are required to present their efforts to advance the 10th Principle in an annual Communication on Progress.The Global Compact and key partners have developed a range of resources to help participating companies implement the 10th principle. These resources outline the ethical and business benefits of anti-corruption initiatives based on legal risks, compromised reputation, financial cost, and the erosion of consumer trust and confidence. Additionally, the Global Compact has embarked upon a multi-year collective action project with Global Compact Local Networks and strategic partners to foster anti-corruption action.