Ethical Performance
inside intelligence for responsible business


Global Compact agrees further rule-tightening

May 2009

Signatories to the United Nations Global Compact will soon have to meet more stringent standards just announced by its board.

From 1 July new business participants will be given one year, not two, from the date of joining, to submit their first ‘communication on progress’ (COP) – a statement explaining how they observe the Compact’s ten principles on the environment, corruption and human rights. If they default, they will be de-listed immediately, not labelled as ‘inactive’, as at present.

From July 2011 a similar rule will be applied to existing signatory companies, which will be de-listed automatically if they fail to issue a COP for a period of more than one year.

The changes, which will force companies to give evidence of their commitment to the Compact principles more quickly, more precisely and more regularly than before, have been made after a review of compliance measures conducted by the Compact Office on the orders of its board, which was concerned about the quality of COPs and the rate at which firms are producing them.

The review also concluded that COP submissions to the Compact’s website will now have to include extra information to improve their usefulness to people who access them.

As a result communications will, among other things, be expected to state whether the company has a human rights policy document, make reference to the International Labour Organization’s core conventions, describe the company’s environmental management systems and detail the outcomes of anti-corruption policies and activities.

Additionally, COPs will have to state whether the information provided has been verified by a third party.

Compact spokesperson Matthias Stausberg told EP the changes are intended to ‘simplify the process, clarify minimum requirements and improve searchability of the COP database’.

He added: ‘Our main driver was the experiences of the past three years. We learnt that most companies that take their commitment to the Compact principles seriously don’t have a problem submitting a COP within a year from joining. We also feel it’s increasingly important to improve their quality as a disclosure instrument relevant to other stakeholders, from civil society to financial analysts.’

The review involved consultation with interested businesses and members of local Compact networks worldwide.

Stausberg said the distinction between inactive and de-listed signatories had caused confusion, and that the new system would remove any doubt about a company’s status.

At 31 March the Compact had 5057 business signatories. So far 861 have been de-listed, most from developing nations.

United Nations | Global | Codes of conduct

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