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01.06.2014 | Ausgabe 2/2014

Journal of Business Ethics 2/2014

United Nations Global Compact: The Promise–Performance Gap

Zeitschrift:
Journal of Business Ethics > Ausgabe 2/2014
Autoren:
S. Prakash Sethi, Donald H. Schepers

Abstract

The United Nations Global Compact (UNGC) was created in 2000 to leverage UN prestige and induce corporations to embrace 10 principles incorporating values of environmental sustainability, protection of human rights, fair treatment of workers, and elimination of bribery and corruption. We review and analyze the GC’s activities and impact in enhancing corporate social responsibility since inception. First, we propose an analytical framework which allows us to assess the qualities of the UNGC and its principles in the context of external and internal elements that influence code effectiveness and implementation. Second, we analyze UNGC performance in encouraging companies to become signatory members and bring about demonstrable change in corporate CSR-sustainability activities. In its 10-year report, UNGC has proclaimed growth in both membership and program activity. However, all credible and publicly available data and documentation conclusively demonstrate that the UNGC has failed to induce its signatory companies to enhance their CSR efforts and integrate the 10 principles in their policies and operations. The result has been a loss of public trust and support of UNGC from important constituencies among civil society organizations, and those individuals and groups adversely impacted by corporate activities and resultant negative externalities. This diminished credibility has also made UNGC largely dependent on the corporate sector for its very survival. We conclude that this dependence has in turn impaired and would continue to hinder UNGC’s ability to fulfill its mission. Such an outcome raises serious questions as to the viability, usefulness, and continued existence of UNGC.

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