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Understanding the Global Compact
United Nations Secretary-General Kofi Annan first proposed the Global Compact in an address to The WorldEconomic Forum on 31 January 1999. Amid a backdrop of rising concerns about the effects of globalization, the
Secretary-General called on business leaders to join an international initiative the Global Compact that wouldbring companies together with UN agencies, labour, non-governmental organizations and other civil-society actorsto foster action and partnerships in the pursuit of a challenging vision: a more sustainable and inclusive globaleconomy.
Explain that the Global Compact is not a UN agency but a network that exists to promote an initiative.
United Nations Secretary-General Kofi Annan first proposed the Global Compact in an address to The WorldEconomic Forum on 31 January 1999. Amid a backdrop of rising concerns about the effects of globalization, theSecretary-General called on business leaders to join an international initiative the Global Compact that wouldbring companies together with UN agencies, labour, non-governmental organizations and other civil-society actors
to foster action and partnerships in the pursuit of a challenging vision: a more sustainable and inclusive globaleconomy.
The Global Compact is a voluntary corporate citizenship initiative. As such, the Global Compact is not a regulatory
instrument it does not police or enforce the behavior or actions of companies. Rather, the Global Compact relies
on the enlightened self-interest of companies, labour and civil society to initiate and share substantive action in
pursuing the principles upon which the Global Compact is based.
The Global Compact seeks to provide a contextual framework to encourage innovation, creative solutions, and good
practices among participants. The Global Compact is not a substitute for regulatory structures or other codes.Indeed, the Global Compact believes that voluntary initiatives and regulatory systems complement each other and,
when combined, provide powerful impetus in encouraging the wide adoption of responsible corporate citizenship.
The emphasis has been to bring about corporate change through the use of a learning approach that facilitates
discussion between the various groups and builds new relationships for future projects. In adopting such an
approach, rather than a classical regulatory approach, the Global Compact has gone into uncharted territory, and
this has invited some criticism from those who would like it to have sharper teeth in the form of monitoring and
verification. However, as stated, these are not areas within the mandate of the Global Compact.
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global compact principles
The United Nations Global Compact asks companies to embrace, support and enact, within theirsphere of nfluence, a set of core values in the areas of human rights, labour standards, the
environment and anti-corruption.The 10 principles of the Global Compact
Human Rights
Principle 1 Businesses should support and respect the protection of international
human rights within their sphere of influence; and
Principle 2 make sure they are not complicit in human rights abuses.
Labour
Principle 3 Businesses should uphold the freedom of association and the
effective recognition of the right to collective bargaining;Principle 4 the elimination of all forms of forced and compulsory labour;
Principle 5 the effective abolition of child labour; and
Principle 6 the elimination of discrimination in respect of employment
and occupation.
Environment
Principle 7 Businesses should support a precautionary approach to environmental
challenges;Principle 8 undertake initiatives to promote greater environmental responsibility;
and
Principle 9 encourage the development and diffusion of environmentally
friendly technologies.
Anti-Corruption
Principle 10* Businesses should work against corruption in all its forms,
including extortion and bribery.
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Introduction to Environmental Principles
The environmental principle has been led by the United Nations Environment Programme (UNEP), since itsinception in 1973
UNEP has provided leadership and encouraged partnerships to care for the environment
For example , through Multilateral Environmental Agreements (MEAs) which have addressed issues such asspecies loss and the need for conservation at a global and regional leve
The three environmental principles of the Global Compact are drawn from a Declaration of Principles and anInternational Action Plan (Agenda 21) that emerged from the United Nations Conference on Environment andDevelopment (the Earth Summit) held in Rio de Janerio in 1992
Key Documents
The Rio Declaration
Agenda 21 - a 40 chapter
The 'Brundtland Report', 'Our Common Future'
Key Environmental Challenges
loss of biodiversity and long-term damage to ecosystems
pollution of the atmosphere and the consequences of climate change damage to aquatic ecosystems
land degradation
the impacts of chemicals use and disposal
waste production
depletion of non-renewable resources
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Environment
Principle 7
Principle 7 Businesses should support a precautionary approach to environmental challenges;
What is Precautionary approach?
Principle 15 of the 1992 Rio Declaration states that where there are threats of serious or irreversible damage, lackof full scientific certainty shall not be used as a reason for postponing cost-effective measures to preventenvironmental degradation.
involves the systematic application of risk assessment, risk management and risk communication.
Why is the precautionary approach important for business?
the idea of prevention rather than cure.
environmental damage entails both opportunity and implementation
Investing in production methods that are not sustainable improving environmental performance means lessfinancial risk
Research and development related to more environmentally friendly products
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steps could companies take in the application of the precautionary approach
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Environment
Principle 8
Principle 8 undertake initiatives to promote greater environmental responsibility;
In Chapter 30 of Agenda 21, the 1992 Rio Earth Summit spelled out the role of business andindustry in the sustainable development agenda as: "Business and industry should increase selfregulation, guided by appropriate codes, charters and initiatives integrated into all elements ofbusiness planning and decision-making, and fostering openness and dialogue with employeesand the public."
The relevant principle in the Rio Declaration says we have the responsibility to ensure thatactivities on our own yard should not cause harm to the environment of our neighbours. Societyalso expects business to be good neighbours. Business gains its legitimacy through meetingthe needs of society, and increasingly society is expressing a clear need for moreenvironmentally sustainable practices.
Key mechanisms or tools for the company to use assessment or audit tools management tools
communication and reporting tools
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What steps could companies take to promote environmental responsibility?
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Environment principle 9
Principle 9 encourage the development and diffusion ofenvironmentally friendly technologies.
As defined in Agenda 21, should protect the environment, areless polluting, use all resources in a more sustainable manner,recycle more of their wastes and products and handle residualwastes in a more acceptable manner than the technologies for
which they were substitutes. considered as total systems including know-how, procedures, goods andservices and equipment as well as organizational and managerialprocedures
The key benefits of environmentally friendly technologies are the following: Implementing environmentally friendly technologies helps a company reduce the
use of raw materials leading to increased efficiency. Technology innovation creates new business opportunities and helps increase
the overall competitiveness of the company. Technologies that use materials more efficiently and cleanly can be applied to
most companies with long-term economic and environmental benefits.
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How can business promote the use and diffusion of environmentally friendly
technologies?
At the basic factory site or unit level, improving technology may be achieved by (i)
changing the process or manufacturing technique, (ii) changing input materials, (iii)
changes to the product and (iv) reusing materials on site
Strategic level approaches to improving technology include the following:
Establishing a corporate or individual company policy
Making information available to stakeholders
Refocusing research and development
Use of life cycle assessment (LCA)
Employing Environmental Technology Assessments (EnTA) Examining investment criteria
Co-operating with industry partners
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The Global Compact in India
The Global Compact Society (GCS) was formed inNovember,2003 and registered in New Delhi as an allIndia forum, for organizations participating in the U.N.sGlobal Compact Programme.
Given the geographical and population size in India therewas need to add a third network to the GC India Networkand that is the India Partnership Forum that is a jointUNDP/CII initiative.
In India, 125 leading companies including Public/PrivateSectors, Institutions, NGOs & SMEs, have joined theGlobal Compact, along with a number of industryassociations, employer organizations and professionalbodies.
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Major Activities Conducted in
India. Website.
National Convention.
Participation in the UNGC leaders Summitat United Nations, New York.
G.C. Regional Conclave in South Asia.
UN GCs Meetings.
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Examples of Practices of G.C. in
India. Carbon Management Group.
Energy Centre For rearch in non-
conventional energy sources
Health Safety and Environment Group.
Mangorve Plantation in Gandhar Area
Ringal Plantation
Paper Recycling:
Drill Cutting Reuse:
Waste-to-Energy:
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Development and diffusion of environmentally
friendly technologies
Bioremediation:
CDM Project Activity
Methane to Market (M2M)
Carbon Dioxide Capture and Sequestration (CCS)
Carbon Disclosure Project (CDP)
GHG Accounting Greening Vendor chain
Sustainability Reporting
Energy Conservation