FAQ
- How do companies participate in the Global Compact?
- How can non-governmental organisations and other non-business participants get involved?
- Is the Global Compact legally binding?
- If there is no monitoring or enforcment, how does the Global Compact know that a company is truthfully portraying its actions?
- Isn't there a danger of companies using UN logos and their affiliation with the UN and the Global Compact to "blue-wash" their operations that might actually be harming society?
- Is the Global Compact a substitute for existing regulatory approaches?
- Why should a company that has already established its own code of conduct participate in the Global Compact?
- Are there any financial obligations in becoming a Global Compact participant?
- I operate a business with less than 10 employees. Can I still participate in the Global Compact?
- Can company subsidiaries join the Global Compact?
1. How do companies participate in the Global Compact?
Answer:
To participate in the Global Compact, a company sends a letter from the Chief Executive Officer (endorsed by the board) to U.N. Secretary-General expressing support for the Global Compact and its principles; and sets in motion changes to business operations so that the Global Compact and its principles become part of strategy, culture and day-to-day operations of the business. The business is also expected to publicly advocate the Global Compact and its principles via communications vehicles such as press releases, speeches, etc.; and is expected to publish in its annual report or similar public corporate report (e.g. sustainability report) a description of the ways in which it is implementing the Global Compact and its principles. This is called the Communication on Progress. In addition to these actions, companies have the added opportunity of participating in a number of Global Compact-sponsored initiatives and programs.
2. How can non-governmental organisations and other non-business participants get involved?
Answer:
As equal partners and important stakeholders, civil society and other non-business organisations can participate through a number of Global Compact engagement mechanisms, including Policy Dialogues, Learning, Local Networks and Partnership Projects. In these areas, such organisations have a crucial role to play in helping to foster partnerships and produce substantive action. Non-business participants are also encouraged to commit their organisation to the ten principles and to report on progress made within their organisation.
3. Is the Global Compact legally binding?
Answer:
No. The Global Compact is a purely voluntary initiative. It does not police or enforce the behavior or actions of companies. Rather, it is designed to stimulate change and to promote good corporate citizenship and encourage innovative solutions and partnerships.
4. If there is no monitoring or enforcment, how does the Global Compact know that a company is truthfully portraying its actions?
Answer:
The Global Compact is not a performance or assessment tool. It does not provide a seal of approval, nor does it make judgments on performance. The Global Compact does, however, seek high quality and integrity in the contributions and activities by companies. Company submissions are shared openly and publicly in forums where peer review and other stakeholder comment is invited. In addition, companies are encouraged to develop their examples of corporate change into larger case studies for peer review. Participants are also expected to publish in their annual report or similar corporate report (e.g. sustainability report) a description of the ways in which they are supporting the Global Compact and its ten principles. This is known as the "Communication on Progress". The Global Compact believes that this sort of openness and transparency encourages good practices by participants, while contributing to the overall integrity of the initiative.
5. Isn't there a danger of companies using UN logos and their affiliation with the UN and the Global Compact to "blue-wash" their operations that might actually be harming society?
Answer:
The Global Compact has developed its own logo, which is used frequently in official Compact documents and publications. The use of the Global Compact image is strictly regulated. The guidelines for use are included here. In addition, the Global Compact has incorporated a set of integrity measures to safeguard the initiative and to avoid potential abuse. The integrity measures cover the use of the logo, the Communications on Progress policy, and a procedure to address allegations of egregious abuse.
6. Is the Global Compact a substitute for existing regulatory approaches?
Answer:
No. The Global Compact views itself as complementing other voluntary initiatives and regulatory approaches by helping to establish the business case for human rights, labour standards, environmental stewardship and the fight against corruption. The Global Compact is a purely voluntary initiative designed to promote innovation in relation to good corporate citizenship. Many of the existing standards support the principles of the Global Compact and are therefore are quite consistent with its overall objectives.
7. Why should a company that has already established its own code of conduct participate in the Global Compact?
Answer:
Corporate codes of conduct are extremely important and many companies have demonstrated leadership and positive change through their development and implementation. The Global Compact is not a code of conduct. Rather, it seeks to add new dimensions to good corporate citizenship by creating a platform - based on universally accepted principles - to encourage innovative new initiatives and partnerships with civil society and other organisations. The Global Compact can serve as an umbrella for a company’s overall CSR approach, under which exists individual company codes, sectoral standards and other initiatives.
8. Are there any financial obligations in becoming a Global Compact participant?
Answer:
The Global Compact is a voluntary initiative, not a formal membership organisation. As such, we do not collect any fees for core funding. The Global Compact only accepts core funding from government donors. On occasion, participants may be asked to contribute to the cost of convening specific meetings and activities they wish to attend, or to a local network. In addition, participants can contribute to the Foundation of the Global Compact, used to finance non-core activities including meetings, publications, and tools.
9. I operate a business with less than 10 employees. Can I still participate in the Global Compact?
Answer:
Due to administrative constraints, companies with less than ten direct employees (micro enterprises) will not be entered into the database of participating companies. However, we encourage micro enterprises to stay informed about all Global Compact activities via this website and to engage with their Global Compact country network.
10. Can company subsidiaries join the Global Compact?
Answer:
The Global Compact applies the leadership principle. If the CEO of a company's global parent (holding, group, etc.) embraces the Global Compact by sending a letter to the UN Secretary-General, the Global Compact will post only the name of the parent company on the global list assuming that all subsidiaries participate as well. Subsidiaries that wish to directly send a letter to the Secretary-General, to underline their commitment, will also be listed as participants, and are invited to become active in the Global Compact country network of their host country.