Sustainability is now firmly on the global business agenda, but transformational change will only happen if efforts are scaled up, the United Nations Global Compact (UNGC) has concluded.
Since its launch in 2000, membership of the corporate sustainability initiative has grown from 44 businesses to 8,041 businesses and 4,449 non-business participants. To assess progress, the UNGC commissioned consultants DNV GL to analyse the impact of the initiative over the past 15 years.
The study found that a number of companies around the world have made important strides in operating more responsibly and innovating for a more sustainable future. However, Dr Henrik O. Madsen, group president and chief executive at DNV GL, warned: “It’s not sufficient that business alone is mobilising. We must offer arenas for collaboration, including for policymakers, science professionals and society at large.”
In order for a more radical transformation to take place, three things need to happen simultaneously, Madsen said. First, the vast majority of companies must regard sustainability as part of how they operate on a daily basis and embed it into their business models. Second, improving governance and regulations can help shift investor practices. Meanwhile, companies can inspire change by showcasing business opportunities and sustainable solutions, he said.
Businesses should increase their efforts since they can contribute human and financial capacity, technology and innovation like no other sector, Madsen said. They should also set an example by paying taxes to the communities where they operate and by not offshoring environmental and social responsibilities to less regulated markets, he said.
The report highlights several significant changes in the past 15 years, including:
- Sustainability is penetrating deeper into markets and sectors all around the world. Signatories to the UNGC are present in 156 countries, and 25% of the world’s largest companies have joined.
- Leading companies are ahead of regulation and drive the debate for smarter legislation. However, these firms are in the minority and less progressive companies are blocking positive change.
- The financial sector is showing positive developments, such as supporting the principles of responsible investment and developing green bonds.
- Some companies are talking about a “net zero footprint” in terms of carbon, water and waste and have set concrete goals for achieving this.
UNGC executive director Georg Kell said: “This report confirms that the tide is turning in corporate practices. Over the past 15 years, companies around the world have been awakening to their role in society and starting to make important strides to operate more responsibly and innovate for a greener, more sustainable future. But there is still a long way to go.”
