Business leaders urged to take environment lead
United Nations secretary-general Ban Ki-moon told a summit of global business leaders in Geneva this month power cannot be separated from responsibility.
Addressing 1,000 business, government, labour and civic leaders at the Global Compact summit in the Palais des Nations last week, he said: “In our interdependent world business leadership cannot be sustained without showing leadership on environmental, social and governance issues.
“That interdependence brings with it a fundamental realization: that power cannot be separated from responsibility; that, for business to enjoy sustained growth, we need to build trust and legitimacy; that, for markets to expand in a sustainable way, we must provide those currently excluded with better and more opportunities to improve their livelihoods.”
The Global Compact is a UN initiative in which multinational companies voluntarily commit to ecologically and socially sustainable globalization.
More than 4,000 companies, trade unions and non-governmental organizations in 116 countries have signed up to the compact’s ten principles relating to human rights, working conditions, the environment and the fight against corruption.
Opening the two-day summit last Thursday (July 5), Mr Ki-moon called on companies to use the compact as a moral compass.
Neville Isdell, chairman and chief executive of Coca-Cola, which has pledged to replace “every drop of water” it uses in soft drinks, said it was time businesses used the compact for collective action.
He added: “Are we a barrier to sustainability, or are we the biggest hope?”
But some are more sceptical of the compact’s capacity to invoke change.
French foreign minister Bernard Kouchner spoke of the “limits of voluntary engagement” and argued eventually the principles would have to be obligatory.
But research presented at the summit shows making changes pays off.
Anthony Ling, chief investment officer of Goldman Sachs, said the market is increasingly rewarding sustainable business leaders
Those who led in implementing environmental, social and governance policies had outperformed the stock market by 25 per cent since August 2005.
The compact’s first annual review showed wide adoption of the principles.
More than 90 percent of chief executives are doing more than five years ago to incorporate environmental, social and governance issues into operations.
But some 500 companies had been de-listed last year for repeated failure to communicate on progress with another 500 expected this year.
© Faversham House Ltd 2023 edie news articles may be copied or forwarded for individual use only. No other reproduction or distribution is permitted without prior written consent.