CEOs Spell Out Eco Initiatives During U.N. Summit

The second Global Compact Leaders Summit revealed strides in responsible business performance and introduced new environmental mandates.

By Danielle Lee

Responsible business practices—with an emphasis on environmental issues—were at the forefront of the second U.N. Global Compact Leaders Summit June 5-6 in Geneva Switzerland, as embodied in both new initiatives and recent study findings.

The audience of more than one thousand CEOs and global leaders put two large ecological initiatives in motion when chief executives of 153 companies urged the government to agree on climate market measurements to replace the Kyoto Protocol when it expires in 2012. And, significantly, the leadership of six corporations launched a more immediate “CEO Water Mandate.”

The six companies—Coca-Cola, Levi Strauss, Lackeby Water Group, Nestle S.A., SABMiller and Suez—introduced this mandate as a call to action for their peers to address the impending global water crisis through better supply chain water management.

“There is huge potential for the private sector to make a real, positive and lasting difference in protecting and preserving fresh water resources,” said E. Neville Isdell, Chairman and CEO of Coca-Cola in a Global Compact press release.

The summit opened with U.N. Secretary-General Ban Ki-moon announcing that the Global Compact now included 4,000 companies and stakeholders in 116 companies that have committed to the ten founding principles. By the end of the two days, the attendees agreed on a 21-point Geneva Declaration plan of action to see globalization reach its full social and economic potential.

“In the beginning, some voiced skepticism about the U.N. working together with business. Today, I think we can say that the Global Compact has lived up to its promise—bringing business together with other stakeholders, and infusing markets and economies with universal values,” Ki-moon said.

The results of these efforts were evident in two reports released at the summit.

The Goldman-Sachs study revealed that companies in six industries considered leaders in environmental, social and governance policies have outperformed the general stock market by 25 percent—with 72 percent of the companies outperforming their peers—since August 2005.

“The evidence is building that embedding universal principles and related environmental, social and governance policies into management policies and operations delivers long-term business value and is rewarded by markets,” said George Kell, Executive Director of the U.N. Global Compact, according to a press release.

A second report published by the Global Compact, Financial Times and Dalberg Global Development Advisors showed that partnerships on environmental issues account for a third of all business corporate social responsibility partnerships on a global level and education projects are the preferred corporate social responsibility partnerships on a local level.

Titled “The Business Guide to Partnering With NGOs and the United Nations,” the report also serves as a ranking of 550 NGOs, U.N. agencies, foundations and other social actors with whom the 20,000 surveyed companies have partnered.

According to the report, the key reasons companies seek these partnerships are to effectively implement their CSR programs and build trust with stakeholders.

73 percent of the surveyed companies anticipate that NGO partnerships will be important or extremely important for them in the next three years. And while microfinance constitutes 5 percent of the partnerships, it is ranked as the most successful type of partnership.

The goal of the guide is to facilitate more partnerships and good collaborative practices, two common company concerns that brought about its publication, said Dalberg Founding Partner Heinrik Skovby in a Global Compact press release.

According to Secretary General Ki-moon, the findings of these Global Compact-released reports show that 90 percent of companies have expanded the integration of the Global Compact’s principles during the past five years.

“Through several groundbreaking reports, you have made it abundantly clear that market leadership and sustainability leadership go hand-in-hand,” said Ki-moon in a closing speech. “This will help us build the supportive measures needed to create more sustainable markets. And it will ultimately help improve the lives of many people around the world.”

The next Global Compact Leaders’ Summit is planned for 2010.

Posted August 8, 2007 in International