The United Nations Global Compact (UNGC) standards are a set of five defining features of corporate sustainability that are detailed within ten principles. The five defining features included goals towards principled business, strengthening society, leadership commitment, reporting progress, and local action (UNGC 2014, 8-9). The ten principles implement those defining features under a four-pillared framework of human rights, labor, environment, and anti-corruption (UNBC 2014, 11). These standards provide a high-level vision and mission for corporate sustainable reporting, but also provide detailed stakeholder forums and sub-initiatives to aid businesses working towards these goals.
The primary strength of this framework lies in that active stakeholder engagement process. Each of the principle pillars are supported by forums that allow a variety of stakeholders to engage and interact with each other to develop best practices on very specific issues that businesses are each facing. For example, the Human Rights and Business Dilemmas Forum is a multi-stakeholder online forum that allows discussion on topics that are focused under 25 different human rights and business themes like migrant workers and gender equality (UNBC 2014, 14). This collaborative stakeholder engagement process is also strengthened by a system of principles that focus on social and governance factors that really focus on the human elements of integrated reporting. This is the first set of standards I have seen that provide that focus which greatly increases the usefulness and effectiveness of comprehensive integrated reporting.
While the UNGC standards do have direct connections to other frameworks like the Global Reporting Initiative, especially regarding a focus on reporting material topics, there is no further defined focus on economic aspects. The topic of economics is seen more from a risk management perspective. However, they do point out that anti-corruption efforts are important to reducing economic impacts and risk which I have found missing from previous frameworks. The light touch on the economic topics can lead to less useful reports for investors, but these standards can be matched with more detailed economic and environmental frameworks like those from Sustainability Accounting Standards Board (SASB) or Climate Disclosure Standards Board (CDSB) standards to deliver a much more effective integrated report then any of those frameworks alone.
Author: Logan Callen
United Nations Global Compact. 2014. Guide to Corporate Sustainability: Shaping a Sustainable Future. Accessed October 27, 2020. https://www.unglobalcompact.org/library/1151.
United Nations Global Compact. 2015. SDG Compass: The Guide for Business Action on the SDGs. Accessed October 27, 2020. https://www.unglobalcompact.org/library/3101.