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Global Sustainability Governance and the UN Global Compact: A Rejoinder to Critics

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Abstract

This article takes the critique by Sethi and Schepers (J Bus Ethics, 2013, in this thematic symposium) as a starting point for discussing the United Nations (UNs) Global Compact. While acknowledging the relevance of some of their arguments, we emphasize that a number of their claims remain arguable and are partly misleading. We start by discussing the limits of their proposed framework to classify voluntary initiatives for corporate sustainability and responsibility. Next, we show how a greater appreciation of the historical and political context of the UN Global Compact puts several of their claims into perspective. Finally, we demonstrate that the alleged promise–performance gap rests on a selected and one-sided reading of the initiative. We close by pointing to some challenges that the initiative needs to address in the future.

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Notes

  1. The term “code of conduct” may be misleading in this context, especially when discussing the UN Global Compact. Although the term is defined in different ways (Leipziger 2003), it is often used to describe company-specific self-regulation (e.g. codes to govern a firm’s supply chain) or refers to certification and auditing programs that monitor compliance against predefined standards (e.g. Social Accountability 8000).

  2. Although Sethi and Schepers (2013) argue that such initiatives have “little practical usefulness”, they also admit that it is possible “to make them work.” Our claim that their framework remains biased rests on the assessment of the different sectors presented in Fig. 1. Here, initiatives that have a diversified/large participant base and rest on broader principles are accused of (a) producing mostly symbolic commitments and no substantive actions, (b) having a flawed governance structure (i.e. one favouring insiders), and (c) promoting rhetorical reporting.

  3. Since the UN Global Compact is by no means a seal of approval for corporate actions, it has adopted a logo policy to prohibit the misrepresentation of participants’ engagement in the initiative. The logo cannot be used “in any manner that suggests or implies that the Global Compact Office has endorsed or approved of the activities, products and/or services of the organization, or that the Global Compact Office is the source of any such activities, products and/or services.” (UN Global Compact, 2013) The use of the general UN emblem for commercial purposes is prohibited as well.

  4. Although not core to the argument, we want to emphasize that, strictly speaking, two points seem to contradict each other. On the one hand Sethi and Schepers (2013) argue that “private sector signatories do not find enough value (in the UN Global Compact) to justify their financial support (to the Foundation for the Global Compact),” while on the other hand they claim that companies reap valuable reputational benefits from the initiative.

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Authors and Affiliations

  1. Copenhagen Business School, CBS Centre for Corporate Social Responsibility, Porcelænshaven 18A, 2000, Frederiksberg, Denmark

    Andreas Rasche

  2. Boston College, Carroll School of Management, Chestnut Hill, MA, 02467, USA

    Sandra Waddock

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  1. Andreas Rasche
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  2. Sandra Waddock
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Correspondence to Andreas Rasche.

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Rasche, A., Waddock, S. Global Sustainability Governance and the UN Global Compact: A Rejoinder to Critics. J Bus Ethics 122, 209–216 (2014). https://doi.org/10.1007/s10551-014-2216-6

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