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Article
Publication date: 20 September 2011

Marinilka Barros Kimbro and Zhiyan Cao

The UN Global Compact (GC) is the world's largest voluntary corporate social responsibility (CSR) initiative. Signatory companies voluntarily agree to abide by the GC ten…

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Abstract

Purpose

The UN Global Compact (GC) is the world's largest voluntary corporate social responsibility (CSR) initiative. Signatory companies voluntarily agree to abide by the GC ten principles and explicitly declare compliance with social and human rights, environmental protection, and anti‐corruption practices. Participants commit to CSR and are required to publish a yearly report called Communication on Progress (COP). If firms fail to provide a COP for one year they are labeled “non‐communicating”, and for two years they are “delisted” from the GC. In 2006, the first list of non‐communicating and delisted firms was announced. The purpose of this paper is to investigate the extent by which being a signatory company – that reports COP – reduces information risk, and thus leads to better market returns, lower cost of debt, and lower cost of equity.

Design/methodology/approach

The authors studied the period from the launch of the GC until the first list of non‐communicating firms was made public, investigating the extent by which being a signatory company – that reports COP – reduces information risk, and thus leads to better market returns, lower cost of debt, and lower cost of equity.

Findings

The results suggest that communicating (reporting) firms have statistically significant higher market valuation – lower book to market – than companies that initially agree to participate in the GC but that do not comply with the reporting requirement. Communicating firms also have statistically significant higher ROA, lower cost of debt, lower cost of equity, and lower beta indicating better performance and less risk. The authors also find some evidence that non‐communicating firms might be “free riding” and could have joined the GC to improve their corporate image.

Originality/value

The paper provides evidence of the value of CSR reporting. It is not enough to disclose compliance with CSR, but it is also necessary to account for this through some sort of formal mechanism such as a CSR report. Voluntary disclosures and narrative statements in annual reports will continue to have questionable information content, but standards of environmental reporting, such as the Global Reporting Initiative, not only improve the way in which social and environmental performance is measured, but they also provide evidence of compliance. This paper also presents evidence of the value of voluntary initiatives such as the GC when these initiatives are supported by formal reporting and when accountability/enforcement measures are in place.

Details

International Journal of Accounting & Information Management, vol. 19 no. 3
Type: Research Article
ISSN: 1834-7649

Keywords

Article
Publication date: 7 July 2017

Michel Coulmont, Sylvie Berthelot and Marc-Antoine Paul

The purpose of this study is to document the concrete practices put in place by United Nations Global Compact (UNGC) affiliated firms and their application of the UNGC…

Abstract

Purpose

The purpose of this study is to document the concrete practices put in place by United Nations Global Compact (UNGC) affiliated firms and their application of the UNGC Communication on Progress (COP).

Design/methodology/approach

The paper examines the practices implemented by firms on the Fortune 500 list that have affiliated with the UNGC and issued a COP separate from their annual report or a sustainable development report. According to the UNGC, the COP policy sets out a description of practical actions the company has taken or plans to take to implement the ten principles.

Findings

The findings tend to show that firms affiliated with the UNGC use a variety of practices to integrate these principles. Many adopt policies based on an international standard relating to a UNGC principle. However, the reporting process supported by the UNGC does not seem to fully promote the widespread application of these practices.

Originality/value

The documentation of these practices will serve as a reference for any business interested in adopting the UNGC principles or for government and non-government organisations, including accounting standard setters, aiming to promote and support the universal principles on human rights, labour, the environment and anti-corruption. In addition, the study reveals weaknesses in the UNGC COP policy that could limit more extensive application of these practices.

Details

Journal of Global Responsibility, vol. 8 no. 2
Type: Research Article
ISSN: 2041-2568

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Article
Publication date: 1 January 2007

William M. O’Keefe

Little attention has been given by researchers to the participant progress reporting database established by the UNGC to function as a transparent and easily accessible…

Abstract

Little attention has been given by researchers to the participant progress reporting database established by the UNGC to function as a transparent and easily accessible repository of program information and ready source of best practices for the Corporate Social Responsibility (CSR) initiatives of the United Nations Global Compact (UNGC) participants across the globe. The purpose of this paper is to assess the current database utilization practices of Compact participant organizations in the South American Region and identify steps that can be taken to enrich the dialogue and exchange of best practices among member organizations. For purposes of this study, only those South American countries with Company and Small and Mid‐Size Enterprise (SME) members were included. Due to the rapid rate of change in UNGC membership, the analysis was limited to the documents and links posted on the database as of September 10, 2006. Data analysis was done by country, followed by a detailed analysis of the reporting practices of the two countries with the largest membership, Argentina and Brazil. This study found that four of the ten nations with UNGC membership, Argentina, Brazil, Colombia and Peru account for 434 of the 482 Company and SME members. Organizations in Brazil led the way to membership growth at the establishment of the Global Compact in 2000, followed by significant growth in membership across the region in 2003 and 2004. Argentina has the highest proportion of active members (51%), followed by Chile (36%), and then Brazil (26%). Peru has experienced the highest rate of inactivity, with 41 of its 57 member organizations, all of whom joined in 2004, having been recently declared “Non‐Communicating” by Compact administration. The comparative analysis of Brazil and Argentina COP reporting practices reveals that the UNGC members in Argentina, with a 51% reporting rate, have universally adopted a short standardized easy‐to‐read reporting format, while those in Brazil, with a 26% reporting rate, utilize a diverse range of reporting formats involving much longer and more detailed CSR‐related reports. There just 27% of the 33 members posted reports utilizing Portuguese exclusively, while 81 % of the 95 Argentina members utilize Spanish only. The study concludes with a discussion of the implications of these findings on the fostering more effective utilization of the UNGC database in order to help member organizations in South America make Corporate Social Responsibility an integral part of their business strategy.

Details

Social Responsibility Journal, vol. 3 no. 1
Type: Research Article
ISSN: 1747-1117

Keywords

Article
Publication date: 7 August 2009

L. Simone Byrd

This purpose of this paper is to examine how two, American‐based, international public relations agencies came to participate in the United Nations Global Compact. The…

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Abstract

Purpose

This purpose of this paper is to examine how two, American‐based, international public relations agencies came to participate in the United Nations Global Compact. The global compact is an initiative which brings together more than 4,000 member organizations in over 100 countries to address some of the world's most pressing issues. Specifically, this paper seeks to identify: the events that prompt these senior‐level executives, as members of their agency's dominant coalition, to initiate participation in the global compact; what obstacles within the agency present challenges to joining the global compact; and how each agency integrates the compact principles into its work.

Design/methodology/approach

Grunig's situational theory of publics is used as a framework to create a single, embedded case study which integrates three subunits of analysis: in‐depth interviews, and primary and secondary document analysis. In‐depth interviews are conducted with one senior‐level executive/counselor from each of the two agencies that are examined. Primary document analysis focuses solely on the Communication on Progress reports which must be submitted on a bi‐annual basis by every global compact participant. Secondary document analysis includes any agency‐produced materials, such as speeches/presentations, as well as articles written for business publications.

Findings

Overall, results indicate that both agencies have yet to fully integrate the compact principles into their own internal functions, and primarily use the global compact as a tool for counseling clients. However, both agency executives reveal that it is going to become necessary for their agency to involve themselves in the global compact, within and across the entire agency – particularly in terms of confronting issues such as ethics and diversity.

Originality/value

This paper adds to the existing scholarship in a few, important ways. First, it incorporates and encourages the continued use of qualitative methods to examine contemporary issues that face the practice of public relations. Second, this research establishes an argument for furthering the idea that public relations professionals can be advocated for social change and can be influenced through the work they do. Finally, this paper stresses the continued importance of public relations work in facilitating global citizenship initiatives.

Details

Corporate Communications: An International Journal, vol. 14 no. 3
Type: Research Article
ISSN: 1356-3289

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Article
Publication date: 9 August 2008

Jorge A. Arevalo and Francis T. Fallon

The changing nature of the interaction between multilateral institutions and the private sector, such as the one extended by the United Nations (UN) through the Global

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Abstract

Purpose

The changing nature of the interaction between multilateral institutions and the private sector, such as the one extended by the United Nations (UN) through the Global Compact, has raised profound questions about authority and legitimacy in international relations. This paper seeks to provide the criteria for fairly assessing corporate citizenship initiatives as these form an integral part of the changing nature of corporate governance.

Design/methodology/approach

This paper uses the Global Compact's 2007 annual review as a point of reference and critical evaluation. The paper refers to the gap found among participants and their inability to answer to the relevant questions of corporate social responsibility (CSR) as originally set forth by the UN.

Findings

There has been a substantial increase in both scale and impact by this type of private sector initiative: a 50‐fold growth in just seven years – unlike any other international collaborative partnership. Based on the assessment, the ongoing question regarding its legitimacy, its operationality and efficiency for improving global governance still remains a challenge at large.

Originality/value

Empirical research on the impact, accountability, challenges and successes of the Global Compact is limited. The aim of this study is to progress understanding of both the limitations on, and opportunities for, the role of business in global governance when CSR is used as an international tool for community involvement. To this end, in addition to a critique of the UNGC's self‐assessment, the paper proposes a researcher's model for assessing corporate citizenship initiatives.

Details

Corporate Governance: The international journal of business in society, vol. 8 no. 4
Type: Research Article
ISSN: 1472-0701

Keywords

Book part
Publication date: 28 January 2015

Alice de Jonge

The chapter aims to clarify the relationship between corporate governance structure and corporate subscription to Global Compact standards. Part one of the chapter looks…

Abstract

Purpose

The chapter aims to clarify the relationship between corporate governance structure and corporate subscription to Global Compact standards. Part one of the chapter looks at the relationship between different models of board governance and active Global Compact participation by publicly listed companies. Part two of the chapter examines a number of external mechanisms aimed at bringing corporate behavior in line with Global Compact principles, and argues that there is a mutually reinforcing relationship between internal governance structures and external provisions aimed at influencing corporate behavior.

Design/methodology/approach

Part one of the chapter uses an independent T-test to compare the average (mean) proportion of publicly listed companies from unitary board countries with an active Global Compact Communication on Progress status with the average proportion of publicly listed companies from two-tier/hybrid corporate governance systems listed as active Global Compact participants. Part two of the chapter uses primary and secondary sources to examine external mechanisms operating across national borders aimed at influencing corporate behavior.

Findings

The chapter finds that a higher proportion of public companies from countries with two-tier/hybrid corporate governance structures have become active Global Compact participants compared to public companies from legal systems with unitary board corporate governance structures. Part two of the chapter examines the potentially mutually reinforcing relationship between internal governance structures and external mechanisms for modifying corporate behavior.

Research limitations/implications

While external codes and standards such as the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises appear to be influencing corporate behavior worldwide, quantitative data confirming and recording the extent and nature of this influence (if any) remains limited.

Practical implications

The chapter provides useful insights for policy makers and corporate leaders into the relationship between internal corporate governance structures and external codes, standards and guidelines aimed at influencing corporate behavior.

Originality/value of the chapter

This chapter provides original insights into whether and how internal governance structures can complement and reinforce social standards regarding global corporate citizenship, and the legal guidelines reflecting those standards.

Details

The UN Global Compact: Fair Competition and Environmental and Labour Justice in International Markets
Type: Book
ISBN: 978-1-78441-295-1

Keywords

Book part
Publication date: 13 April 2015

Maria Alejandra Gonzalez-Perez and Liam Leonard

This chapter examines roles and challenges for corporations in addressing Post 2015 world development objectives. Specifically it does review the contributions and…

Abstract

Purpose

This chapter examines roles and challenges for corporations in addressing Post 2015 world development objectives. Specifically it does review the contributions and opportunities of the principles of the Global Compact and other social responsibility initiatives for embedding corporate contribution to sustainable markets and societal development.

Methodology/approach

The results presented in this chapter are based on analysis of secondary sources and a literature review to determine conceptual and theoretical frameworks for identifying assumptions and challenges of corporate sustainability in the Post 2015 era.

Findings

It was found that although there are neither academic nor activist definitive consensuses regarding positive impacts of adopting the UN Global Compact principles for sustainability, the impacts of committed corporations, organisations and association are multiplying societal understanding of the implications in societies, governments and markets of violating human and labour rights, degrading and not protecting the environment, and having corruption.

Practical implications

This chapter could be used as teaching material for undergraduate and master courses of corporate social responsibility, business ethics, sustainability, operations management and strategy.

Originality/value

This chapter discusses firms’ responsibilities regarding world development objectives in a Post 2015 world.

Details

Beyond the UN Global Compact: Institutions and Regulations
Type: Book
ISBN: 978-1-78560-558-1

Keywords

Book part
Publication date: 26 November 2021

Luis Velazquez

To perform a detailed analysis of the inherent complexities in achieving the 9th Sustainable Development Goal (SDG), it is necessary to understand the procedures used by…

Abstract

To perform a detailed analysis of the inherent complexities in achieving the 9th Sustainable Development Goal (SDG), it is necessary to understand the procedures used by member states delegations to follow-up and review the progress made in implementing the SDGs and targets as mandated in the A/RES/70/1 Resolution adopted by the General Assembly on September 25, 2015 (U.N. General Assembly, 2015); best known worldwide as ‘Transforming our world: the 2030 Agenda for Sustainable Development’. Hence, this chapter aims at providing an overview of sustainability reporting practices to the U.N. High-level Political Forum on Sustainable Development (HLPF). It starts by reflecting on the U.N. landmark events from which the 2030 Agenda emerged and the political and cultural context prevailing at that time. Afterward, it argues on the guidance documents issued by HLPF for following up and reviewing individual countries’ progress. The most controversial issue covered in this chapter undoubtedly concerns information gathering. This issue is because stakeholders consistently question the accuracy of data being provided, not only on Voluntary National Reviews (VNRs) but also on corporate sustainability reports. Therefore, the chapter also covers the guidelines of independent external organisations such as the Global Compact Initiative (GCI) and Global Reporting Initiative (GRI) used by firms to legitimate sustainability reporting content and increase reliability. Finally, this chapter concludes with a brief description of required procedures to submit and present VNRs.

Article
Publication date: 6 April 2012

Olga Andrianova and Taisiya Yeletskikh

The purpose of this paper is to analyse whether the concept of societal marketing being practised in developed countries can be directly applied to countries in…

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Abstract

Purpose

The purpose of this paper is to analyse whether the concept of societal marketing being practised in developed countries can be directly applied to countries in transition, such as Belarus, and what adjustments would be beneficial to achieve this. The paper takes a comprehensive view of the complex linkages between the implementation of corporate social responsibility (CSR) principles by examining elements of societal marketing in the European Union (EU) countries and in Belarus.

Design/methodology/approach

Data are provided by the web sites of European best practice companies and data from the Global Compact that identifies socially‐responsible companies in the EU and Belarus. The results for Belarus are combined with the insights from capacity building activities on societal marketing organised by the Local Network Global Compact (LNGC) Belarus, for private and public enterprises.

Findings

The research presents two groups of companies in Belarus: Start‐up companies see their CSR activities as philanthropic actions; and On‐the‐way companies integrate elements of societal marketing such as vision and stakeholder management into their practices. The European societal marketing experience can act as a mechanism for further integrating CSR principles into business practices in Belarus. This depends on the aptitude of the companies for social innovation, the level of stakeholder involvement and the governmental support for CSR policy creation.

Research limitations/implications

The scope of the research should be broadened out to other industries and tested with a larger sample, including small‐and medium‐sized firms. It is also necessary to analyse other key drivers of the CSR in Belarus, which can impact on further use of societal marketing components.

Practical implications

This research has implications for practitioners, specifically the groups of stakeholders involved in CSR programmes in Belarus. The results suggest how stakeholders can apply societal marketing and differentiate themselves from competitors in the EU and in Belarus.

Originality/value

The paper proposes a framework on societal marketing that considers the factors that influence CSR development and provides recommendations for businesses operating in Belarus on how to achieve a competitive advantage in a country in transition.

Article
Publication date: 6 March 2017

Cubie L.L. Lau, Cliff D. Fisher, John F. Hulpke, William Aidan Kelly and Susanna Taylor

Essays on social responsibility call the United Nations Global Compact (UNGC) “by far the world’s largest corporate responsibility initiative”. The authors look at two…

Abstract

Purpose

Essays on social responsibility call the United Nations Global Compact (UNGC) “by far the world’s largest corporate responsibility initiative”. The authors look at two avenues to encourage responsible business behavior. First, at law, where law is not the answer and, second, at the UNGC. This paper aims to increase awareness of the UNGC, an umbrella organization supporting corporate good conduct.

Findings

The goal is to make corporations socially responsible. Law by nature addresses misconduct. The UNGC is more positive, encouraging responsible behavior in ten areas. The UNGC could be more effective. The authors suggest that social media and management education can help the UNGC positively impact corporate behavior.

Practical implications

The UNGC represents a significant opportunity. If the UNGC lives up to its potential, corporate misconduct may be lessened and corporate good behavior could be publicized, rewarded and increased.

Originality/value

The time has come to let readers start thinking about the UNGC and its goals. This can help bring greater social responsibility in tomorrow’s businesses.

Details

Social Responsibility Journal, vol. 13 no. 1
Type: Research Article
ISSN: 1747-1117

Keywords

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