Socially responsible corporate practices are still not part of business culture. Out of some 80,000 multinational corporations around the world, only a small percentage embraced corporate sustainability, UN says. In spite of several UN-backed initiatives to foster greater involvement of companies to advance sustainable development around the world, businesses so far have been slow to align their operations with universally accepted values and principles in the areas of labor, human rights, environment and anti-corruption. Worse, the majority have yet to make any commitment to these universal principles.

Embracing socially responsible corporate practices makes good business sense, says Georg Kell, the Executive Director of UN Global Compact, the UN initiative for promotion of socially responsible corporate practices. During press conference in New York this week, Mr. Kell talked about progress that had been made after a decade of UN efforts to mobilize businesses all over the world to adopt universal UN principles and values. Even so, a total of 3,123 companies, out of more than 7,000 from 140 countries that had joined the UN initiative, were expelled since 2005 for non-compliance and for failure to implement the Compact’s sustainability principles. Furthermore, many participants of UN initiative continuously fail, says Global Compact.

Having become the masters of the actual economy rather than its  public servants, financial markets are now a threat to economic stability; they distort investment and trade and heighten levels of inequality, says Supachai Panitchpakdi, the Secretary General of the UN Conference on Trade and Development (UNCTAD) in his most recent report on development-led globalization.

The casualties of the economic crisis are numerous. There are 200 million unemployed worldwide; the Millennium Development Goals will also not be achieved by 2015, as Governments worldwide had pledged; and further progress on greenhouse gas emissions reductions has stalled as well, UNCTAD report reveals.

World economy needs to create over the next ten years 400 million new jobs for the new entrants to the labor market, says International Labor Organization (ILO). Some 75 million of young people are currently unemployed, with youth unemployment rate standing at 12.7 percent worldwide, ILO also reports. Worse, the rate does not even reflect some of the young people who had altogether dropped out of the labor market.

The UN Economic and Social Council (ECOSOC) brought together this week representatives of governments, private sector and youth from around the world to discuss youth unemployment. Ms. Asha-Rose Migiro, the UN Deputy Secretary-General, underscored while addressing the gathering in New York that monetary and fiscal policies must be redesigned to boost youth employment. Ms. Migiro pointed out that youth unemployment rate rose to 18 percent in the developed economies at the beginning of 2011 and in North Africa and in Western Asia to 40 percent.

Mr. Ban Ki-moon, the UN Secretary-General, in his introduction to the most recent World Youth Report that was released by the UN Department of Economic and Social Affairs (DESA), talks about the “largest generation of young people the world has ever known.” The UN system needs to be pulled together “like never before to support a new social contract of job-rich economic growth,” Mr. Ban Ki-moon argues before he concludes: “Let us start with young people.”

In spite of the ongoing worldwide calls for corporate sustainability on broader scale, the question if the world’s corporations are ready for more sustainable course of doing business persists. The notion that we can reconcile corporate responsibility and speculative market is still alive and well. According to Executive Director of Global Compact, less than 10 percent of the corporate participants had joined their movement and initiatives.

Similarly, the Secretary General of UNCTAD stated that it was revealing that even a fraction of the resources used to save ‘too big to fail’ financial institutions could never be allocated in times of economic prosperity for social welfare, economic and social development, infrastructure-building  or to tackle environmental and other challenges.

The UN Secretary General during the February corporate sustainability summit in New York called on global businesses and the United States companies in particular to support more strongly UN initiatives saying: “We need corporate sustainability to be in the DNA of business culture and operations.”

But will business leaders around the globe join forces with Global Compact in advancing sustainable development and the green growth agenda? Rio+20, the upcoming June UN Conference on Sustainable Development, and the Corporate Sustainability Forum present an opportunity for the international community to demand more from global businesses and convince them once and for all that stable development is incompatible with the speculative market.

Although it is encouraging that some 400 business schools around the world began to integrate the Global Compact into their curriculum, more needs to be done.

A shift in the global political and economic landscape is evident. New political alliances have emerged, says the Secretary General of UNCTAD Mr. Supachai in his report and the share of developing economies in the world income increased to 30 percent with trade and investment patterns shifting accordingly.

Market economies can operate within a wide spectrum of political as well as social arrangements, with no single model of state-market relations for others to follow, Mr. Supachai further states. However, the interdependent world also calls for international leadership and collective responsibility.

Mr. Supachai talks in his report about “underlying weaknesses” ignored prior to the current economic crisis and the pronounced risks when the financial markets disconnect themselves from the real economy, and tie wealth creation to the fast accumulation of debt and rising asset prices, and channel innovation to financial engineering instead of to technological progress. But is corporate world listening?

At the end of January, the UN High-level panel on Global Sustainability also released Resilient People, Resilient Planet: A future worth choosing, a report that calls for a transformation of the global economy with more than 50 recommendations for successful launching of sustainable development. The panel recommends among other the incorporation of environmental and social costs in “regulating and pricing of goods and services.”

The Panel writes in its report that the current global development model is unsustainable and it warns that we risk condemning up to 3 billion people to endemic poverty by failing   resolve the sustainable development.

Executive Director of UN Global Compact Georg Kell says that Panel’s work confirms that a lasting transformation of the global market requires a significant shift in the way we look at the cost of externalities. Considering the distance before reaching a final destination, our tipping point in corporate sustainability, it is time “to take business to task,” Kell concludes.

We need to break the pattern of economic thought that led to international financial crisis if we want to find a new way forward, many argue. Maybe, the head of UNCTAD said it best when he declared that the world was in need of “a global new deal.”

Source: UN

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