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An Australian focus for the global compact

by Amanda Armstrong
05 August 2009
BUSINESS AND PROFESSIONAL ETHICS;
THE ETHICS CENTRE
To commemorate the launch of the United Nations Global Compact Network in Australia Georg Kell, Executive Director of the United Nations Global Compact, recently visited Canberra to speak about his hopes for the Network and to advocate the role the investment community plays in leading the charge towards greater corporate citizenship. Amanda Armstrong reports.

Joined by Senator the Hon Nick Sherry at Parliament House in Canberra, George Kell addressed the tenth National Business Leaders Forum on Sustainable Development to launch the United Nations (UN) Global Compact Network in Australia.

For St James Ethics Centre, which will house the initiative as part of the Treasury-funded Responsible Business Practice project, the establishment of this Network will drive forward the responsible business practice agenda in Australia.

Launched in 2000, the UN Global Compact revolves around ten principles for business on human rights, labour, the environment and anti-corruption. The principles are derived from international instruments that enjoy widespread government support, namely the Universal Declaration of Human Rights; the International Labour Organisation’s Declaration on Fundamental Principles and Rights at Work; the Rio Declaration on Environment and Development; and the United Nations Convention against Corruption.
 
This Network will reflect a uniquely Australian perspective on the Compact’s principles and provide practical help for Australian companies to integrate into their business practices.

With over 5,000 business participants from more than 130 countries around the world, the Global Compact’s development of a Focal Point in Australia for the world’s leading voluntary corporate citizenship initiative will offer business a vibrant, relevant and inclusive network.

St James Ethics Centre’s Head of Responsible Business Practice, Rosemary Sainty, says this Network will reflect a uniquely Australian perspective on the Compact’s principles and provide practical help for Australian companies to integrate into their business practices.

While talking about the aspirations he holds for the future of UN Global Compact Network in Australia, Georg Kell mirrored these sentiments and went further to suggest that the creation of this Network will not only be good for Australian businesses, but will be beneficial to the UN Global Compact as a whole.

Beyond acknowledging the importance of having infrastructure at a country level to support growth and promote action for corporate responsibility on the ground, Kell suggests that each Network provides something unique back to the UN Global Compact and contributes to the strengthening of the initiative.

Country networks are absolutely key for the UN Global Compact and increasingly are actually defining what the compact is. The amount of activity that is now generated by the 5,300 corporate participants and 1,000 non-corporate participants around the world is increasingly driven from the bottom up – where innovation is generated by collective action that is organised and taking shape and where the interface with public policy making occurs.

Already there is a noteworthy expectation that the newest Network will make a significant global contribution. By applying Australia’s own culturally specific dimensions, the vision is that this Network will offer insight and expertise towards the strengthening of the UN Global Compact. For Kell it is Australia’s deep connectivity with natural issues, opportunities for advanced technological progress and strong regional positioning that places this Network in good stead to embrace the values based principles and become a leader. Further he remarks that it is Australia’s propensity to be honest and open when commenting on the state of global affairs that will positively contribute to the broader agenda and drive progress.

It is impossible to know where this progress will take the UN Global Compact over the next decade, but looking back over the last nine years Kell has already seen an evolution. He suggests that initially corporate citizenship was more involved in notions of legitimacy and obtaining a license to operate, where as today global conditions have added the driver of sustainability – specifically the impact of climate, water, food and so forth.

Even though it is difficult to predict the next evolution of the UN Global Compact, and indeed the global circumstances in which it will operate, Kell suggests that the one known factor vital for success is the necessary engagement of the investment community with the United Nations Principles for Responsible Investment (UNPRI) playing a critical role.

Kell believes that in order to progress the corporate citizenship agenda we must connect the investment community with the principles of corporate citizenship and create awareness that non-financial issues matter. The role, and influence, of the investment community becomes instantly apparent when Kell explains that the 400 institutional investors that support the UNPRI represent over US$18 trillion, accounting for roughly 10% of global liquidity.

Looking at that statistic alone, it is clear that integrating responsible investment into mainstream thinking and the decision-making processes of investors, asset owners and asset managers will have, and does already have, a truly significant impact on the community.

But while those who have adopted the UNPRI have made a significant contribution to corporate citizenship, Kell suggests there is still a way to go.

"The truth is, and I think it is fair to say, that the investment community, is still lagging behind the business community. The business community because of it’s exposure to the real world and the lessons it had to learn has developed many tools and many good practices that the investors don’t yet know enough about. It is very important to bring United Nations Global Compact Networks and investors together so that they better understand and learn from business . . . The positive news is that with the UN Global Compact Network formally launched in Australia, the opportunity for this level of broad collaboration is greater than ever before."

For Georg Kell it is this notion of collaboration, and strong, considered leadership that constitutes the fundamental elements for success. For Kell, leadership at its core is simple:

"You need a clear long-term vision, recognise you have choices and, perhaps most astutely, you need to be aware that in making those choices there is a right and wrong – a moral and ethical dimension."

It is the last point that seems to most often be forgotten, overlooked or swept under the carpet. But for Kell it is absolutely essential: “No markets can flourish without sound ethics. Ethics underpin markets in every respect.”

For Kell, these decisions are not just the domain of CEOs, senior executives and board members alone. To him, we all have a hand to play in ensuring ethical leadership is at the forefront of our businesses and organisations. As Kell says: “To me it boils down to something simple – how you want to live your life. Be aware you have choices and make the right choice.”

Perhaps in this bleak time of lack of corporate trust and transparency, the launch of the Australian Network has presented an opportunity for many of us to take on a leadership role and make significant practical steps towards inclusive integration and cooperation in efforts to achieve greater corporate citizenship.