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A Compact for Sustainability

Georg Kell on how companies can come together on transformative sustainability.

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22 October, 2012
By: Georg Kell

My message is one of encouragement, but also one of urgency.

We live in a volatile world where there is very little predictability. There is certainty only about the prospect of more uncertainty. We know that on the climate front, in all likelihood, we will not be able to manage global warming within two degrees Celsius. We know that the world is fragmenting in many ways, and that it is increasingly difficult to forge multilateral consensus from the top down.

However, we also know that the world is ever more interdependent – that the free flow of ideas, trade, and investment has brought enormous benefits. In fact, the biggest decrease of poverty and human misery has occurred in the past 10 years.

In this world full of contradictions, we have the means, the ways, and the possibilities to make lasting positive change. On the other hand, we do not seem to be willing to mobilize the collective necessary political will to make it happen.

In the face of historic challenges, I fear that leadership for the long-term collective good is in a deep freeze. Fragmentation is making us forget some important lessons learned. We are deeply concerned about the slow progress in deciding and creating smart incentive structures that reward good performance, as well as about the fracturing political consensus worldwide.

This is where business comes in, and where business increasingly is willing to step up and push forward. Just a few months ago, we welcomed 2,700 corporate participants, investors, and others in Rio de Janeiro at the Rio+20 Corporate Sustainability Forum, where for the first time in UN history the private sector arguably was ahead of Governments. Business has shown that it is possible to move ahead. It is organizing itself around platforms, around issues, and around concepts, and is increasingly willing to invest in sustainable solutions.

Sustainability, according to our definition, is the long-term delivery of values in financial, environmental, social and ethical terms. For companies, that means recognizing that the long-term success of their operations is closely tied to the well-being of the countries and communities in which they operate. By being proactive and ahead of the curve, companies can ensure that future leadership goes to those who are most advanced.

But leadership can only be effective if it has followers. You cannot be a leader without leading toward transformation, or you will isolate yourself and operate on an island. This is where the UN Global Compact has made inroads around the world, with 7,000 corporate participants from 135 countries organized in country networks that are pushing the bottom-up change agenda – hoping that over time they will make the case for adopting sustainability and inspire policymakers to do likewise.

In the area of human rights, Global Compact participants commit not only to respect, but also to support the promotion of human rights by making a positive contribution to their realization in ways that are relevant to their business. The UN Guiding Principles act as a global standard applicable to all business enterprises, and provide clarity for the two human-rights principles championed by the Global Compact. They reinforce the Global Compact and provide an authoritative framework for participants, including on implementing robust policies and procedures, and communicating annually with stakeholders about progress. Initiatives such as the Women’s Empowerment Principles and the Children’s Rights and Business Principles are helping the private sector advance gender equality and incorporate a child-rights perspective within the sustainability agenda.

Furthermore, companies have an interest in peace and stability. A lack of predictable political and economic frameworks and violence disrupts production and supply lines, increases operating costs and delays business activities. For companies of all sizes, being operational in “conflict-prone”, “weak”, or “post-conflict” countries poses a number of dilemmas with no easy answers. The UN Global Compact provides a dynamic forum, bringing together all stakeholders in society to enhance the capacity of companies to make a positive contribution to peace and development.

This corporate sustainability movement is truly global today. The good news is that it is indeed happening in the North and the South, in the East and the West. But it can only be sustained if there is genuine front-running commitment and leadership to push the agenda forward. It can only happen if innovation, new ideas, creation of markets, and the demonstration of competitiveness through cooperative engagement show the way forward.

Corporate sustainability has grown enormously over the past decade, but it is not yet a transformative force – although it has the potential to be just that. We will be transformative once we reach a tipping point, and that is within sight. We know it is achievable, but we are not yet there.

The most urgent task now is to scale up, to look for inspiring and innovative solutions, to spread best practices, and to deepen engagement in this agenda in order to ensure that corporate sustainability is a driving force for organizational change, for design, for implementation, and for organizing market and societal relations. This must become transformative. I urge chief executives to show leadership and actively orient their businesses towards corporate sustainability. It is time for us all to wake up to the urgency of sustainability, scale up our actions and speed up the delivery of collaborative solutions.

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