What do Tyco Services, Huatai Group, Ford Malaysia, L’Oreal Argentina, Barclay’s Bank of Ghana and The Ethical Investment Company of Australia all have in common? Each is among the 630 companies the United Nations Global Compact has booted off of its worldwide list of participants for failure to submit a “Communication on Progress” report since the beginning of the year. (You can see the full list of the booted here.)
The Communication on Progress, says the organization’s website, “is a communication to stakeholders (consumers, employees, organized labour, shareholders, media, government…) on the progress the company has made in implementing the ten principles in their business activities and, where appropriate, supporting UN goals through partnerships.” The UNGC currently boasts 4619 “business participants,” each of which is expected to submit a communication.
The above-mentioned “ten principles” is a set of declarations in the areas of human rights, labor relations, environmental protections and anti-corruption standards that the group’s voluntary members pledge to strive toward.
OK, so what? What can the UNGC do to punish these companies for failing to submit communications on their ten principles progress? The short answer is “precious little.” As question four of the UNGC’s own FAQs asks: “Is the Global Compact legally binding?” And the answer is: “No. The Global Compact is a purely voluntary initiative. It does not police or enforce the behavior or actions of companies…”
You also have to wonder if the booted-off companies failed to submit their reports because they had abandoned their principles or if, as seems likely in at least some instances, it’s simply a case of “the dog ate my homework.”
Either way, being denounced by a branch of the United Nations doesn’t exactly look good on a company’s resume.
What would you do if you found your company on the UNGC’s list of recalcitrants?
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