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|  | JULY 20, 2004
By Pete Engardio Two Views of the Global Compact A pair of experts discuss whether the U.N.'s corporate-responsibility program should foster dialogue or enforce standards How can the U.N. make the greatest impact on promoting corporate responsibility in the developing world? Is it better to work with a small group of multinationals whose practices stand up to strict scrutiny by labor, environmental, and human-rights activists? Or can the U.N. accomplish more good with an organization that has a wide tent, including both model global corporate citizens and bad ones, and then gradually ratchet up compliance standards? This essentially is the issue that's roiling the Global Compact, the U.N. program launched in 2000 that now includes more than 1,700 companies and several dozen international nongovernmental organizations (NGOs) and labor federations. Groups like Amnesty International, Friends of the Earth, Oxfam, and Human Rights First say because the Compact hasn't developed a transparent system for assessing what companies are doing to honor their commitments, the program lacks credibility (see BW, 7/12/04, "Global Compact, Little Impact"). WELL VERSED PARTICIPANTS. U.N. officials say it's beyond the Compact's scope to be an enforcement body. It's more valuable to get as many companies as possible to publicly promise to abide by acceptable social and environmental principles and use the Compact as a forum to discuss best practices with activists, U.N. agencies, and other companies -- and then raise the reporting and compliance standards (see BW, 7/12/04, "Kofi Annan's Business Plan" and "Raising the Bar for Corporate Behavior"). Which side is right? I asked two consultants who are well versed in all aspects of the corporate-responsibility movement. One is Scott Greathead of World Monitors. Greathead was a founder in 1978 of the Lawyers Committee for Human Rights and is best known for representing the families of U.S. church women who were murdered in El Salvador in the 1980s. Clients of his New York consultancy include Newmont Mining (NEM ), Reebok (RBK ), and Chevron Texaco (CVX ). The second authority is John Elkington, chairman of London-based SustainAbility. Elkington has been a dean of the corporate-responsibility movement for three decades. His books include The Green Consumer Guide, Cannibals with Forks, and The Chrysalis Economy. He consults for Royal Dutch Shell, Bayer (BAY ), Procter & Gamble (PG ) and many others. "ASPIRATIONAL STANDARDS." Both Greathead and Elkington have followed the Compact closely from the beginning and are in frequent contact with both U.N. officials and the NGOs criticizing the program. Greathead is more sympathetic to the U.N. position that it's better for the Compact to build a broad membership. Elkington, however, thinks that if the Compact doesn't put more focus more on enforcement and transparency, it will put the U.N.'s credibility in a "dangerous, exposed position." Greathead believes the Compact serves a very two important functions. "The most important role the Global Compact plays is in fostering dialogue between companies and their civil society critics -- and we're talking about at the CEO level," he says. This function was on good display at the Compact's recent annual summit at the U.N.'s New York headquarters, where representatives of Oxfam, Amnesty, and others assailed corporate practices while executives of British Petroleum (BP ), Pfizer (PFE ), Nestle, The Gap (GPS ), Shell, and other companies were in the audience. The Compact is also important because it "lends the stature of the Secretary General to the concept of corporate responsibility and the importance of the business community in addressing these issues," he says. "This is an important message that many CEOs hadn't been hearing." Although the Compact lacks any enforcement program, it's still valuable to "have a set of aspirational standards so that companies know what's expected of them."
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