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Article
Publication date: 23 March 2020

Kalle Johannes Rose

Recent research has emphasized the need for engaging non-financial companies in combating money laundering for the efforts to be efficient and effective. To incentivize…

Abstract

Purpose

Recent research has emphasized the need for engaging non-financial companies in combating money laundering for the efforts to be efficient and effective. To incentivize engagement, several options are available, such as regulation, voluntary disclosure or commitment to international principles such as the United Nations (UN) Global Compact. The purpose of this paper is to analyze how anti-money laundering fits the aim of the UN Global compact and how anti-money laundering can support the other principles of the UN Global Compact. Furthermore, this paper addresses the necessity to include anti-money laundering in the core principles to reach the overall goal of sustainability by the UN Global Compact. Such an inclusion will incentivize the signatories of the UN Global Compact to include anti-money laundering as a part of their social responsibilities, helping the financial sector in combating money laundering.

Design/methodology/approach

The methodology of this paper is a functional approach to law and economics. It seeks to enhance the efficiency of the regulatory framework combating money laundering by including economic incentive theory and addressing new areas of law.

Findings

The paper finds a strong relationship between the UN Global Compact and anti-money laundering. Furthermore, it is concluded that it is necessary to include anti-money laundering as a core principle in the UN Global Compact if the Global Compact is to be efficient and effective in terms of its sustainability goals. The reason being that money laundering to a great extent supplies operational finances to the illegitimate sector related to core issues of the UN Global Compact such as human trafficking, child labor and corruption.

Originality/value

The paper identifies a significant missing element with regard to the core principles of the UN Global Compact. Although most research within anti-money laundering concerns the financial sector and thereby does not address the UN Global Compact, the focus of this paper is the link between anti-money laundering and the UN Global Compact. Furthermore, most research related to the UN global compact does not connect the core principles to the illegal financing of the businesses contradicting the principles. This paper addresses both of the neglected areas and combines them to improve the overall combating of money laundering while supporting the UN Global Compact sustainability goal.

Details

Journal of Money Laundering Control, vol. 23 no. 2
Type: Research Article
ISSN: 1368-5201

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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

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Article
Publication date: 9 November 2015

Barry Oliver, Blanca Pérez-Gladish and Paz Méndez-Rodríguez

The purpose of this paper is to identify whether the Spanish stock market experiences a negativity effect on the announcement of Spanish consumer sentiment information and…

Abstract

Purpose

The purpose of this paper is to identify whether the Spanish stock market experiences a negativity effect on the announcement of Spanish consumer sentiment information and if firms that are signatory to the UN Global Compact on corporate social responsibility are relatively more salient in the minds of investors.

Design/methodology/approach

The authors use consumer sentiment announcements to show how the negativity effects on the Spanish stock market are significantly influenced by how salient the stock is in the minds of investors. If a firm’s stock exhibits negativity effects on the release of consumer sentiment information then this stock is salient to investors. If firms who are signatory to the UN Global Compact exhibit significant negativity effects, it could be concluded that these stocks are salient, particularly if firms that are not signatory to the Global Compact do not exhibit a similar negativity effect.

Findings

The IBEX35 index experiences significant negativity effects upon the release of Spanish consumer sentiment announcements. This is similar to that reported in other countries, notably Australia and the USA. Using the constituent firms in the IBEX35 index, the authors find that those firms that are signatory to the UN Global Compact are significantly more likely to experience negativity effects upon the release of Spanish consumer sentiment information than if they are not signatory to the Global Compact. This indicates that firms that are part of the UN Global Compact are more salient to investors.

Research limitations/implications

Available published Spanish data on consumer sentiment.

Practical implications

Little is understood of the impact that consumer sentiment announcements have on stock prices. Studies in USA and Australia have identified significant negativity effects in stock markets when consumer sentiment information is released. This research has found that a psychological negativity bias occurs in firms that are salient to investors. Salience has been found to be important in asset pricing.

Originality/value

This paper tries to find out which companies are more likely to sign the UN Global Compact. These companies are more sensitive to consumer sentiment, because they depend on the everyday decisions of the consumers. The more the companies depend on consumers, the more they care about them. And, when the consumer sentiment goes down, they are more affected by this sentiment. These firms are also more worried about the long term. They are not only thinking about the profits in the short term but also about maintaining the generation of profits in the long term.

Details

Review of Behavioral Finance, vol. 7 no. 2
Type: Research Article
ISSN: 1940-5979

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Book part
Publication date: 28 January 2015

Arzu Özsözgün Çalişkan

The United Nations Global Compact initiative is presented for businesses and nonbusiness as a universally accepted set of principles. The aim of the 10 principles in the…

Abstract

Purpose

The United Nations Global Compact initiative is presented for businesses and nonbusiness as a universally accepted set of principles. The aim of the 10 principles in the areas of Human Rights, Labor, Environment, and Anticorruption is to encourage businesses to align their operations and strategies with committed values. The Global Compact network involves not only companies but also governments, labor, and civil society organizations. Corporations, community, and environment are integral parts of a system that correlate to each other. In light of the assumption that business operations have increasingly observable effects on the environment, economy, and social life on a global scale, it is necessary to have accountable and sustainable firms. The Global Compact is a voluntary strategic policy initiative, and it has become more important in where interactions between organizations and stakeholders to be more dynamic. On the other hand, sustainability has economic, social, and environmental dimensions, and in accordance with these dimensions, it is necessary for firms to take into account the influence of their operations on their stakeholders. Thereby, from theoretical perspectives, the primary objective of this chapter is to illustrate the role of Global Compact in corporate accountability and sustainability.

Design/methodology/approach

An extensive literature research is conducted in order to understand the relationship between Global Compact principles and corporate accountability and sustainability.

Findings

From a theoretical point of view, there are some conditions for the advancement of the corporate accountability and sustainability. For instance, there is need for stakeholders’ insistence about incorporating social and environmental values into the business economic decisions. Thus firms could contribute to not only worlds’ economic but also social as well as environmental future.

Research limitations/implications

The research is a theoretical study, but for further studies, empirical studies can be conducted to understand the interactions between Global Compact principles and corporate accountability and sustainability.

Practical implications

This study may be useful for managers to realize the role of Global Compact principles on corporate accountability and its contribution to being a sustainable firm.

Originality/value

There is a lack of studies that analyze the role of Global Compact principles on corporate accountability and sustainability. Examining the principles in light of corporate accountability and sustainability will add a value to the literature in this area.

Details

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

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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

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Book part
Publication date: 28 January 2015

Harish C. Chandan

This chapter discusses how businesses can create alignment between their corporate sustainability (CS) efforts that focus on the triple bottom line of the financial…

Abstract

Purpose

This chapter discusses how businesses can create alignment between their corporate sustainability (CS) efforts that focus on the triple bottom line of the financial, environmental, and social, and the 10 principles of the UN Global Compact in the four core areas of environment, human rights, labor standards, and anticorruption.

Design/methodology/approach

Based on the literature review, the relationship between CS and corporate responsibility is presented. Creating alignment between CS management and Global Compact initiatives requires knowledge of the Global Reporting Initiative (G4-GRI), third-party CS rankings, green supply chain management, and anticorruption strategies.

Findings

UN Global Compact is an international forum to promote and self-report CS and corporate social responsibility [Bitanga & Bridwell, 2010. CS is achieved through a triple bottom line – financial, environmental, and social (Hutchins & Sutherland, 2008). For CS management, businesses use four strategies including defensive, cost-benefit, strategic, and innovation/learning [Buchholtz & Carroll, 2008; Egbeleke, Journal of Management and Sustainability, 4(2), 92–105 (2014); Epstein, 2008; Epstein, Buhovac, & Yuthas, 2010]. The UN G4-GRI is the most widely used comprehensive sustainability reporting standard in the world (G4-GRI, 2013). Third-party, industry sector-specific CS ratings reinforce the self-reported sustainability reports. Each firm has to conduct their own CS cost-benefit analysis to determine how CS practices can lead to value creation for sustained competitive advantage. Creating alignment with Global Compact initiatives offers firms a marketing advantage. Conducting business in accordance with the Global Compact is a value-increasing business strategy [Kaspereit & Lopatta, 2011; Lopatta & Kaspereit, 2014; Michelon, Corporate Reputation Review, 14(2), 79–96 (2011)]. Green supply chain management is essential for CS (Penfield, 2014). Four prevailing anticorruption frameworks or intervention policy approaches include law enforcement, economics, moralism, and cultural relativism (Bellows, 2013). There is little sustainability reporting in the government and public-sector organizations (Adams, Muir, & Hoque, 2014).

Research limitations/implications

It is difficult to quantify the financial and social benefits of aligning the CS efforts with the 10 principles of UN Global Compact [Parisi, Journal of Management and Governance, 17(1), 71–97 (2013); Nilipour & Nilipour, Interdisciplinary Journal of Contemporary Research in Business, 3(9), 1084–1092 (2012)]. The environmental impact can be easily quantified.

Practical implications

As the primary driver of globalization, businesses and other organizations can help ensure that markets, commerce, technology, and finance advance in ways that benefit environment, economies, and societies in both developed and developing countries leading to sustained development.

Originality/value of the chapter

The role of green supply chain management and anticorruption strategies in CS management is explored.

Details

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

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Book part
Publication date: 28 January 2015

Emel Esen

The United Nations Global Compact is a voluntary initiative in four areas as human rights, labor, environment, and anticorruption with 10 universal principles. This…

Abstract

Purpose

The United Nations Global Compact is a voluntary initiative in four areas as human rights, labor, environment, and anticorruption with 10 universal principles. This network brings corporations, nongovernmental organizations, employees, and people together. There is a need to have responsible and committed leaders to promote good corporate citizenship in the framework of Global Compact. Leaders have a unique position through which they can influence factors concerning organizations’ and employees’ behavior. According to the areas of UN Global Compact, some leadership styles seem to better suit to benefit economies, societies, markets, and people all over the world than the others. By this way, from the theoretical perspectives, the primary purpose of this chapter is to investigate the leader’s behavior and different leadership styles in organizations that are the part of Global Compact platform. There are certain leadership theories – transactional, transformational, sustainable, ethical, and servant – which are examined in Global Compact initiatives.

Design/methodology/approach

An extensive literature research is conducted in order to understand the different types of leadership styles while organizations are adapting and understanding the Global Compact principles.

Findings

Modern leadership styles especially ethical leadership behavior should be effective to comply with universal principles and organizations can also have commitment to disclose a report with powerful leadership.

Research limitations/implications

However, this research is a theoretical study; for further studies, longitudinal studies can be conducted to understand the leadership styles from the perspective of Global Compact principles, and these different managers’ behaviors can be measured.

Practical implications

This study may be useful for the board of directors and managers since they should participate and adapt themselves to this initiative about how they should behave in the right way.

Originality/value

There is a lack of behavioral studies while analyzing Global Compact principles. Especially examining leadership theories that are complied with these principles will add a value to the literature in this area.

Details

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

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Book part
Publication date: 28 January 2015

Juan Carlos Diaz Vasquez, Jaime Alberto Ospina Gallo and Margarita María Montoya Peláez

The purpose of this chapter is to describe the First Contact Pilot Program carried out in collaborative work between ISAGEN, a partly government-owned firm within the…

Abstract

Purpose

The purpose of this chapter is to describe the First Contact Pilot Program carried out in collaborative work between ISAGEN, a partly government-owned firm within the energy sector, and Universidad EAFIT, a private university in the city of Medellin.

Design/methodology/approach

The First Contact Pilot Program was developed following an existing model implemented at the Universidad Externado de Colombia, a private university located in Bogotá. Nevertheless this pilot program took methodology elements from ISAGEN and its suppliers relationship policy. Additionally content concerning the Global Compact and its principles was provided within the subject “Senior Seminar.” Students from this subject were voluntary participants in the pilot program.

Findings

The chapter provides a brief survey conducted by ISAGEN wherein some findings are visible. In this survey the First Contact Pilot Program participating entrepreneurs were asked about their motivations in order to voluntarily be part of the program and they recognized the great importance of this initiative for their businesses to change lots of practices and to become part of a global market culture.

Research limitations/implications

This first version of the program was at the same time a way to invite other big organizations in the city of Medellin to take part in such activities. Massive participation, not only from the big players but also from small and medium enterprises, is necessary to achieve the goal of spreading the Global Compact’s principles. In the longer run it assures the creation of a fairer market place where all players in all sizes contribute to respect and promote a core of best practices in business.

Practical implications

One of the most remarkable implications by designing and implementing the pilot program was the fact of having interactions between International Business Students and local small and medium firm managers together talking about the Global Compact and the way it may improve many aspects within the firm and toward stakeholders.

Originality/value of the chapter

A particular feature of this chapter to be considered as original and valuable is the establishing of networks for the dissemination of the Global Compact’s principles. Collaborative work among private and public sectors and with higher education institutions in fostering the transformation of business practices to achieve a fairer global market place constitutes the aim of this particular pilot program. At the same time this pilot program embodies the spirit of the UN PRME in giving the students of International Business the opportunity to develop their capabilities to become the future managers aware of the sustainability value for business.

Details

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

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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

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Article
Publication date: 8 October 2018

John Fraedrich, Othman Althawadi and Ramin Bagherzadeh

The continued rise of the multinational and debate as to what constitutes global business values is predicated on the UN Declaration and Global Business Compact. This…

Abstract

Purpose

The continued rise of the multinational and debate as to what constitutes global business values is predicated on the UN Declaration and Global Business Compact. This research suggests both documents explicitly exclude the existence of a foundational ethereal power creating morals thereby nullifying two thirds of the general population’s belief system. The authors argue against humanism as a global value beginning and suggest theism as a better origin and use the scientific method to introduce mathematical axioms supporting theism and complimenting humanism. Ontologically, the theist becomes a stronger base for the scientific inquiry into morals, values and business ethics. A comparison of major religious morals revealed eight factors: assurance; candor, fairness and honesty; character, integrity, truthfulness and exacting in truth; charity and compassion; environment; perseverance and tolerance; sacrifice; and seriousness. The research suggests that the UN documents do not adequately reflect these morals suggesting a change for businesses especially in Islamic regions.

Design/methodology/approach

A comprehensive review of religious materials emphasizing morals rather than customs, eternal entity description or negative behaviors yielded 1,243 morals and associated synonyms via six religions (Buddhism, Confucianism, Christianity, Hinduism, Islam and Judaism) representing 4.5 billion people. All positive morals were cross-referenced and only common items across all six religions were included. With the 29 common morals, the authors completed a word meaning search and did a second comparison that yielded 8 moral factors or constructs.

Findings

Eight moral factors were found to be common in all major religions (assurance, fairness/honesty, character/integrity, charity/compassion, environment, tolerance, sacrifice and seriousness). By using the scientific method (Axioms), the authors argue that theism is a better beginning to researching morals and values within business and marketing.

Social implications

Multinationals should be made aware of the disconnect between the underlying problems of the Global Business Compacts’ values and the global morals identified. The results suggest adopting a codification system based on the pertinent morals as related to economic theories: capitalism, socialism and theism. The use of theism as a base to business and marketing ethics includes billions of customers and employees and their belief systems that should increase the validity and reliability of actions associated with corporate social responsibility, the environment and best practices.

Originality/value

The UN Declaration and subsequent Global Business Compact are argued to be flawed by its exclusion of religious morals and the historical period in which it was created. By using the scientific method and creating two axioms, the base to all business and marketing ethics must shift to the common moral factors identified.

Details

Journal of Islamic Marketing, vol. 9 no. 4
Type: Research Article
ISSN: 1759-0833

Keywords

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