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October 12, 2006
Global Compact Aligns with GRI and the Practical Side of the Change Agenda
    by Bill Baue

In part two of this two-part interview, speaks with Georg Kell about new alliances facilitating Communication on Progress reporting as well as broader issues facing the Global Compact.

In the wake of announcing the de-listing of 335 companies, the Global Compact also announced new alliances to facilitate Communication on Progress (COP) reporting. At the unveiling of the third generation sustainable reporting guidelines (dubbed G3) by the Global Reporting Initiative, the Global Compact announced its alliance with GRI by releasing a guide on how to use G3 in preparing a COP. The Global Compact has also allied with SRI World Group to launch the OneReport COP Publisher, a free web-based tool for generating COPs. (Disclosure: SRI World Group publishes speaks with Georg Kell, executive director of Global Compact, about these alliances as well as alignments between the Compact and broader corporate social responsibility (CSR) issues. How do you see the Global Compact COP, the GRI, and the OneReport tool working together?

Georg Kell: First, the OneReport tool is just what it says--it's a tactical tool aimed basically at first-time COP reporters.

The link between the Global Compact and GRI is very important--in part because it's a non-exclusive link. We're not saying you must use GRI if you participate in the Compact--we're saying you can, and indeed we recommend you use GRI. In order to have a better basis for comparability over time, we think it's useful to slowly converge towards a platform.

But we recognize that in certain economies, they use other benchmarks that are equally good, and we accept them as well. Some companies are just starting to develop their own internal benchmarks--if they make them public, we welcome that as well.

SF: There was some perception, particularly in the activist community, of the Global Compact lacking teeth. How does the de-listing help demonstrate the teeth that the Global Compact has?

GK: First, we always have objected to this criticism because it criticizes us for something we never pretended to be. We never claimed to have teeth to bite--we always argued, from the very beginning, the Compact is about learning, dialogue, and partnership. The only contribution we really can make is to help establish the business case for applying the principles.

Nevertheless, we accept the charge that even a voluntary initiative needs integrity measures. Our Integrity Measures mean, in essence, protecting the investments of those who take the initiative seriously versus those who potentially abuse it or are not seriously engaged. So for us the COP is a very important tool to ensure that the brand of the initiative is protected, that the investments made by those participants who genuinely engage in the initiative by changing their management systems and corporate strategies at headquarters and at subsidiaries around the world, are protected against those participants who do not really embark on a change agenda but simply sign on a letter.

SF: In addition to the COP component, what are other important components of the Integrity Measures?

GK: We have through our local networks and through our core UN partner agencies the ability to deal with what we call 'dilemma situations' that cause major concern. Through local learning forums, which we now have in 63 countries, such dilemmas are being discussed and solutions are being found. In rare cases, we use our good office here to remind participants about the commitment they have made to the Compact and what this entails. And in very rare cases, we ask other UN agencies to look into these issues in greater detail. Every year we have probably 15 to 20 such situations.

But we have many more issues being discussed and solved at the local level. This is where the future lies, because whenever you have a problem, you want to find a solution. If you are on the practical side of the change agenda, as we are, and not the judgmental side, because we have no court, no legislative coercive mechanism, then the issue is really to find a solution with NGOs, business, and others on the local level. Here, the good news is that this is increasingly happening and that the local networks are very good tools for that.

SF: How does the Global Compact fit into the bigger picture of corporate social responsibility and sustainability?

GK: Looking forward on the whole movement, I do believe that corporate responsibility is at a crossroads--on the one hand, it has gone global and has mainstreamed, but on the other hand, it is running the risk of fizzling out because many actors involved are now becoming professional service providers, and the question is, what does it all add up to? This is why we proposed the alliances and the call to CSR organizations to preserve the public goods face of corporate responsibility and to make sure it remains connected to the broader aspirations that the movement brought into existence in the first place. So I think it's important that we recognize that if corporate social responsibility is to add up to more than performance improvement of some companies, if it is to have an impact on global markets contributing to more beneficial business-society relationships, then it's absolutely necessary now to support the global frameworks that already have traction and which stand for open-source, public good frameworks--we have only two, and this is why we formed this alliance between the Global Compact and GRI.

The response from many organizations around the world is extremely encouraging and positive. I think that call to action has been heard. We dub this alliance the 'Big Bet' because the big bet is that Global Compact and GRI will be successful at a truly global level if CSR organizations recognize that it pays off for them and the broader good to align themselves more explicitly with these two initiatives, whether it's in provision of tools, whether it's in research and analysis and service provisions, and so forth.

SF: So you're seeing a globalized mainstreaming and acceptance of CSR. Am I hearing you right that it's important that there remains advocacy…

GK: Absolutely. The movement must remain connected to some broader aspirational goals--what I call a public good dimension of the movement--because if it just goes downstream, commercial, compartmentalized, professionalized, then we're losing sight of the bigger picture and we no longer maintain a link between corporate social responsibility and the broader objectives it as designed to contribute to in the first place.

SF: So the danger is that CSR becomes just a business move instead of something that truly addresses sustainability?

GK: Exactly.

SF: Georg, thank you very much for speaking with me.

GK: You're most welcome.

In part one of this two-part interview, speaks with Georg Kell about the de-listing of 335 companies from the Global Compact for failing to issue Communication on Progress reports.


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