Corporate Social Responsibility

Standards and Principles

On this page

• Human Rights Reporting Mot Meeting Full Disclosure, GRI Says
• Working With Local Populations - How Governments and Corporations Should Make A Positive Impact
• New Ethics Reports for Small and Medium-Sized Businesses
• International Organization Established to Promote Carbon Markets
• Rewriting the Social Contract - Alan White, BSR
• Connecting the Global Compact and the GRI
• FTSE4Good New Anti-Bribery Criteria
• New IFC Sustainability Standards
• UN Global Compact

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Human Rights Reporting Not Meeting Full Disclosure, GRI Says

In new survey, only nine companies out of 100 fully met the Global Reporting Initiative’s standards on human rights reporting

The Global Reporting Initiative’s (GRI) “G3 Sustainability Reporting Guidelines” are widely used as a standard for companies developing their corporate social responsibility (CSR) reports, but a new survey from the Netherlands-based global network shows that reporting is still far from standard.  GRI, along with the Roberts Environmental Center (REC) at Claremont McKenna College in California, focused in this report on how companies are reporting on human rights specifically.  The findings show that even if companies declare that they follow GRI’s G3 Guidelines, many reports are not providing full disclosure, as GRI standards dictate. 

Corporate reporting on human rights is a relatively recent activity.  The concepts of what activities constitute human rights and how these activities should be presented in a report still vary from company to company, despite GRI’s attempt to standardize the process. 

In order to level the playing field, so that readers can gain a more accurate perception of how a company fulfills its human rights obligations, GRI developed the “G3 Human Rights Performance Indicators.”  They are composed of nine different topic areas, and there is a detailed explanation as to how companies should address each in terms of company policy, action and performance.  With these guidelines in mind, GRI and REC set out to assess 100 different company reports from corporations listed in the Fortune Global 500.  Their evaluation criteria included 1) the organizational structure of reporting; 2) what topics constituted human rights; and 3) the kinds of information reported. 

In addition, these organizations wanted to know how in-depth human rights reporting is across global corporations.  They evaluated the “presence, absence, or statement of non-relevance; for fully, partially or not meeting the requirements of the specific G3 Performance Indicators; for depth of reported information and for presence of performance information, both quantitative and otherwise.”  

The following are a few highlights from the report under the main criteria categories:

STRUCTURE

• About half of companies address human rights in the social section of their CSR reports.  Only 22% had a section dedicated solely to human rights.
  
  
• Companies in the manufacturing and banking sectors were the most likely to include human rights in their supplier guides.
  
  
• Overall, companies take a more broad perspective of human rights than GRI.  Categories that GRI labels “labor” and “procurement” are often included in corporate reports under human rights.     
  
  
• Many companies reference outside organizations as part of their policy statement.  The United Nations Global Compact and the International Labor Organization’s Core Conventions were the organizations referenced most often.
  
  

CONTENT

• There was a wide variation in the amount of attention given to each of the nine G3 Human Rights Performance Indicators.  “Non-discrimination” was addressed by 97% of the reports. 
  
  
• 71% of the reports addressed child labor and 67% address forced and compulsory labor, BUT only 35% met GRI’s requirements, either partially or fully, for child labor and only 32% did so for forced and compulsory labor.
  
  
• The extractive and manufacturing industries had the highest scores in addressing human rights topics overall.
  
  

DEPTH

• Still only nine companies fully met the G3 Human Rights Performance Indicator requirements.
  
  
• The topic “investment agreements,” one of the nine G3 Human Rights Performance Indicators, was given the least attention in corporate reports.  According to GRI, “This indicator is meant to be a measure of the extent to which human rights are integrated into an organization’s economic decisions, such as partnerships or significant capital investments.”  Employee training on policies and procedures concerning aspects of human rights that are relevant to operations was also less frequently reported.
  
  
• Only 21% of companies who reported that they follow G3 Guidelines included information on performance in all cases, and only 11% of those that did not mention G3 Guidelines included performance information.  Quantitative information (included in the G3 Guidelines) regarding performance was used even less frequently in both cases.

NUMBER OF G3 AND NON-G3 REPORTERS MEETING SPECIFIC G3 PERFORMANCE INDICATORS

Source: Global Reporting Initiative's "Sustainability Reporting in Human Rights"

To read the full report, please visit the GRI website.

Posted 4/15/08

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Working With Local Populations – How Governments and Corporations Should Make A Positive Impact

Protecting local populations in developing countries, especially where the rule of law is weak, is fundamentally a human rights issue - both governments and companies have key responsibilities here. 

Two new reports focus on this complex and core corporate social responsibility issue.

Amnesty International emphasizes that the Cambodian government should be protecting their citizens, but instead it stands by as local populations are forcibly evicted without due process.  Here, and elsewhere, corporations are coming under increasing pressures to contribute to improvements in the communities where they work.  Caroline Rees writes in an article for Ethical Corporation that companies need to establish effective mechanisms for grievance processes. 

Government Failure - Forced Evictions in Cambodia Without Due Process

“Forced eviction is becoming one of the most widespread and systematic human rights abuses affecting Cambodians.”
– Amnesty International

Despite the Cambodian government’s claims to be “pro-poor” and its acceptance of numerous United Nations principles and conventions, Amnesty International reports in Rights Razed: Forced Evictions in Cambodia that well over 30,000 Cambodians have been displaced due to forced evictions in the last five years.   Based on field visits conducted between March 2006 and June 2007, Amnesty International found Cambodians were forced, sometimes violently, to leave their homes “without consultations, due process of law, legal or other protection, and with no consideration of adequate alternatives.”  These people were then relocated to barren land with little access to clean water and effective health clinics. 

Forced evictions target the poor because they have little knowledge of their rights, limited access to NGOs who could seek redress, and are the least likely to be able to represent themselves.  Indigenous peoples are particularly vulnerable.  Amnesty International reports that Prime Minister Hu Sen has called for an end to these abuses, but government officials have not demonstrated the political will to change legislation or enforce existing laws.

The UN has already established a comprehensive set of guidelines regarding the rights of indigenous peoples, the right to land, and the right to an adequate standard of living, which Amnesty International outlines in detail in the report.  The group advocates that government officials strongly enforce these principles, to which Cambodia has already agreed and that they better incorporate the principles into existing laws.  It also recommends a complete moratorium of forced evictions until these reforms take place.

Corporate Diplomacy – Establishing An Effective Grievance Process

“Companies with complex structures, operations and supply chains can expect to face disputes over their impacts on communities and other stakeholders, however good their policies, monitoring and auditing systems.”
– Caroline Rees, fellow at the Corporate Social Responsibility Initiative at Harvard University

Corporate activities are bringing companies in closer contact with local communities, which means disputes between the groups will likely rise.  The question for companies is how to resolve these disputes effectively.

According to Ms. Rees, courts are one strategy of resolving these disputes, but often create deep rifts between the two groups who have to continue working with each other, and legal costs are expensive.  Rees continues to discuss how grievance processes can be most effective in practice, based on principles devised by the Harvard University’s Corporate Social Responsibility Initiative. 

“A mechanism must carry legitimacy and trust, in part by involving all stakeholder groups in its design and oversight; it must provide ease of access to its potential end-users as well as predictability of process and transparency of outcome; and the processes it offers must be seen to be fair to all and empowering of those who are most vulnerable.

The type of process also matters. Many companies create an avenue for aggrieved parties to raise their concerns – via a complaints box, hotline or liaison officer – but then, after investigation, make a unilateral decision on the response. The principles therefore highlight the need for mechanisms at the operational level to focus on engagement and dialogue, with adjudication roles left to external bodies.

The principles are supported by accompanying guidance and explanation. They do not prescribe a uniform model, but offer scope to design systems that suit the sector, culture, scale and context in question.”

Excerpts of this article are reproduced with permission from the February edition of the London-based global business magazine Ethical Corporation. For a free trial, click here.

Posted 2/20/08

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Ethics for Small to Medium-Sized Businesses

2 New Reports
► INSTITUTE OF BUSINESS ETHICS
► TRANSPARENCY INTERNATIONAL

The Institute of Business Ethics notes that its recent briefing explores what business ethics means for small to medium-sized business enterprises and how they can introduce and support high standards of business practice. Why think about business ethics?

The report, issued in December 2007, noted:

Few directors of small and medium sized enterprises (SMEs) will deny the importance of good, trusting relationships with customers, employees, suppliers and the community. The success of their company depends on it.

Also, due to requirements higher up supply chains, smaller firms are increasingly asked about their social and environmental credentials during tendering processes with large corporations.
SME owners and managers will also recognise the importance of trust and ethics in business when on the ‘receiving end’ of unethical business practice; for example, when suppliers deliberately do not meet agreed terms and conditions.

Owners and managers can often encounter ethical challenges. Examples include:
• Do I meet a deadline with my customer and ship out products even though I know there is a possibility they might be faulty, or do I openly discuss my difficulties with the customer?
• How do I ensure that my employees do their work properly and do the right thing?
• How do I deal with my employees’ desire to balance their work obligations with their personal ones?
• How do I respond when securing an important contract seems to require the payment of a
kickback?
• Do I delay payment to suppliers and the Inland Revenue when my cash-flow is currently limited?

The desire to build trusting internal and external relationships, as well as growing pressures from wider society, should lead SME owners and managers to consider to what extent ethical values and principles guide their business behaviour. What does ‘doing the right thing’ mean?

Ethical Values in SMEs
SMEs are characterised by informal understandings and shared expectations among the workforce of how business is done. Any values and ethical principles will usually be implicit rather than formally expressed through ethics policies, codes and programmes that are familiar in large companies. The ethics of a small organisation is typically influenced by the owner manager or managing director. Through their very visible presence, their personal attitudes and behaviours will set the tone of the business and have the potential to signal to employees how seriously ethical behaviour is to be taken in the organisation.

SMEs are not typically able to devote as many resources to building an ethical workplace culture as larger organisations. However, there are advantages to having a somewhat more formal ethics policy in place. Firstly, it reinforces and makes explicit the values and principles that are part of the organisational culture, so allowing them to be communicated to stakeholders. Secondly, a policy will provide guidance and support to employees on how they are expected to conduct their business.  A policy will provide a context and the vocabulary for employees to raise any concerns they have with their supervisors or the directors. It will form a framework for management and staff to decide what is the “right
thing to do”.

How to develop and implement an ethics policy

Identify and define core values of the business
An effective ethics policy will be based on a set of values. Values may be thought of as agreed standards of behaviour, expressing beliefs about the ‘good’ and the ‘right’ in the context of the organisation; they are commonly derived from wider cultural and societal value systems. When identifying the organisation’s core values, it may help to think of some values as business values and others as ethical values, although the distinction can be blurred and business and ethical values are often interrelated.

Some benefits of making ethical values explicit
• Increased employee loyalty, higher commitment and morale as well as lower staff turnover
• Attraction of ‘high-quality’ staff
• Reputational benefits (customers and suppliers)
• More open and innovative culture
• Decreased cost of borrowing and insurance
• Generation of good-will in the communities in which the business operates

(please see the full report.)

Transparency International has published a new guide, released in late January 2008, designed specifically to help small and medium-sized enterprises (SMEs) develop policies and procedures to address bribery (this is based on an earlier guide for all enterprises): The Business Principles for Countering Bribery - Small and Medium Enterprise (SME) Edition.

The new guide provides a framework for companies to develop comprehensive anti-bribery programmes. Whilst many large companies have no-bribes policies all too few implement these policies effectively. TI encourages companies to consider using the Business Principles as a starting point for developing their own anti-bribery programmes or to benchmark existing ones. The development of the Business Principles for Countering Bribery, introduced in December 2002, was spearheaded by Transparency International in co-operation with Social Accountability International. The Business Principles are the product of a collaborative effort involving companies, academia, trade unions and non-governmental bodies.

More than 95% of the world’s business is carried out by small and medium-sized enterprises (SMEs). Small and medium sized enterprises may not have the same human and financial resources as larger companies but are just as vulnerable to the risks of bribery. SMEs also play a fundamental role in the supply chains of large international companies which increasingly are requiring anti-bribery commitments from their suppliers.

In addition to anti-bribery principles, the SME Edition includes practical guidance on how to develop an anti-bribery programme that is tailored to the size and resources of individual businesses and sample rules on gifts and entertainment.

Transparency International states that countering bribery makes good business sense for SMEs. It can help manage risk and build reputation, especially with customers. Practices that were once seen as an inevitable part of doing business in many parts of the world are becoming increasingly unacceptable. More stringent domestic laws and international conventions such as the 1999 OECD Anti-Bribery Convention and the United Nations Convention against Corruption are compelling companies to develop new anti-bribery policies or to review existing ones. The high-profile corporate scandals of recent years have made companies increasingly aware that corrupt practices pose serious and costly risks to their reputation and sustainability. This understanding, coupled with growing public expectation of accountability and probity in the corporate sector, are putting added pressure on companies to articulate and live up to more ethical business practices.

(please see the Business Principles for Countering Bribery - Small and Medium Enterprise (SME) Edition (pdf for download)

Posted 2/12/08

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A Call To Action...
International Organization Established to Promote Carbon Markets

The first coalition of global entities engaged in the process of designing or implementing carbon markets, called the International Carbon Action Partnership (ICAP), has been formally established. At a summit in Lisbon, Portugal on October 29, representatives from 11 countries, four U.S. states, British Columbia, and the European Commission, convened to set out several initiatives to promote the implementation of carbon markets through mandatory cap and trade systems, setting this strategy to combat climate change, which the U.S. administration has largely shunned, as an international priority. 

According to the organization’s website, “Membership is open to all public authorities and governments that have established or are actively pursuing carbon markets through mandatory cap and trade systems as one approach for reducing greenhouse gas emissions.”

ICAP declared in a press release that it “will open lines of communication for sharing valuable information, such as research, effective policy initiatives, lessons learned and new developments.” Among its principles, ICAP recognizes the need for urgent action, well-developed policies will create economic growth, market-based solutions in the form of cap-and-trade are a key component to economic strategy, reducing greenhouse-gas emissions requires global cooperation, and that national and regional carbon markets offer significant potential for international climate policy.

Participating members include:

British Columbia, New Jersey, California, New York, European Commission, New Zealand, France, Norway, Germany, Netherlands, Greece, Portugal, Italy, Spain, Ireland, United Kingdom, and Maine  

Posted 10/30/07

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Is It Time to Rewrite
the Social Contract?

By Allen L. White
Senior Advisor, BSR

Prepared April 2007

The following is an excerpt from a paper published by Business for Social Responsibility

In the midst of BHP Billiton’s assessment of the consequences of its massive and  dramatically successful effort to reverse malaria in the region surrounding its aluminum smelter in Mozambique, the general manager of the smelter commented, “you can imagine, it was huge disaster. We could not deal with that level of absenteeism, and we would have had more fatalities. If we didn’t treat malaria we could not operate.”

Not long ago, such an intervention on the part of a private firm in a traditionally governmental function like public health was a rarity. Today, interventions are increasingly commonplace, both in instances where a business case is evident (as in Mozambique) and in instances where the economics are less than compelling but the moral high ground is unambiguous.

Examples of corporate activities that impinge upon public goods abound: pharmaceutical  companies providing affordable HIV/AIDS drugs to battle the pandemic worldwide; beverage companies controversially extracting potable water resources in India; multinationals assuming control over public water supplies in Bolivia; and privatization of mass transit in the UK and roadways in India.

Amid the broad spectrum of public goods — public health, public education, public lands — the emergence of the corporation as an investor, advisor and partner has moved from the exceptional to the expected. By all indications, this trend will accelerate in the coming decades as societal expectations of business stretch the traditional boundaries of companies from purely profit-driven entities to organizations with an obligation to operate with an enduring commitment to the public interest.

Click here for the complete paper in pdf

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Connecting the UN Global Compact and the Global Reporting Initiative

To download as .pdf

An agreement has been reached between the United Nations Global Compact, which is dedicated to stimulating global responsible corporate citizenship, and the Global Reporting Initiative (GRI), the leading international institution setting standards for corporate social responsibility.

The Global Compact now embraces more than 3,000 companies in over 100 countries who endorse and claim to actively promote the organization’s key social responsibility principles that embrace strengthening human and labor rights, protecting the environment, and promoting anti-corruption. Until now, however, the range of codes and values-statements and basic CSR standards accepted by all of these companies has ranged greatly. The Global Compact has announced that it will encourage its member companies to pursue the sustainability reporting approaches of the new GRI G3 Guidelines.

The two organizations, which explained their new relationship at the recent annual meeting of Business for Social Responsibility in New York (November, 2006), released a “draft publication” in October that explains how the two frameworks of these global organizations are going to work together and how companies can best take advantage of this cooperation. The two organizations are looking for feed-back on this initiative and plan a final version of their guidance publication in July 2007 at the next Global Compact Leaders Summit.

Behind this initiative lies an effort by the GRI to expand the universe of users of its standards and the goal of the Global Compact to assist its member companies as they comply with the its requirements on “Communication on Progress” (COP).  The Global Compact is keenly aware that companies may want to join it for the prestige of an association with the United Nations, but then do nothing to demonstrate adherence to the core principles. Accordingly, reporting on COP is key.

Companies can provide COP reports in many forms, but over time it is likely that they will be encouraged increasingly to use the GRI’s G3 guidelines. According to the Global Compact, “The purpose of the COP requirement is not only to ensure and deepen the commitment of Compact participants and to safeguard the integrity of the initiative. It also aims to create a rich repository of corporate practices that serves as a basic for continuous performance improvement. For companies, it is a tool to excercise leadership, facilitate learning, stimulate dialogue and promote action.”

Georg Kell, Executive Director of the Global Compact, says, “Companies participating in both initiatives have long stressed the understanding that the GRI is a practical expression of the Global Compact.”

The two organizations assert that the value of sustainability reporting is not only found in the final product but also in the process. Leading companies are using the reporting processes as an internal management tool. 

Posted 12/4/0

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FTSE4Good Index Launches New Countering Bribery Criteria

“The FTSE4Good criteria signal that countering bribery is an important part of the corporate social responsibility agenda. If we are to achieve the Millennium Development Goals, then bribery must be tackled and the FTSE4Good criteria are an important contribution towards this aim.”

- Jeremy Brooks, Board Director of Transparency International

In this summary -  details on the new bribery criteria, and background on the FTSE4Good Index.

FTSE Group (Financial Times Stock Exchange Group), the leading UK index provider, will launch, effective, July 1, 2006, a new set of criteria to counter bribery for its FTSE4Good Index  - the leading socially responsible investing (SRI) index in the UK.

The criteria, which FTSE claimed in its February 22, 2006 press release is the most developed and transparent counter-bribery criteria in any CSR index. The new criteria take the Transparency International Business Principles for Countering Bribery as a starting point. Bribery is defined as “an offer or receipt of any gift, loan, fee, reward or other advantage to or from any person as an inducement to do something which is dishonest, illegal or a breach of trust in the conduct of the enterprise's business.”

The Countering Bribery criteria were developed on the basis of broad consultation over an 18-month period involving input from many stakeholders, including corporations, fund managers, government representatives, NGOs, business associations and private investors (see more detail below).

Background

FTSE4Good has three goals:

• To provide a tool for responsible investors to identify and invest in companies that meet globally recognized corporate responsibility standards.
• To provide asset managers with a SRI benchmark and a tool for SRI practices.
• To contribute to the development of responsible business practice around the world by encouraging companies to strive to meet the criteria.

FTSE4Good can be used in four ways:

• Investment – a basis for socially responsible financial instruments and fund products.
• Research – a research tool to identify socially responsible companies.
• Reference – a reference tool to provide companies with a transparent and evolving global corporate responsibility standard to aspire to and surpass.
• Benchmarking - a benchmark index to track the performance of socially responsible investment portfolios.

The FTSE4Good Index is revised semi-annually through the scrutiny of annual reports and other publicly available material, questionnaires and the research of the Ethical Investment Research Service (EIRIS).

Before the introduction of the Countering Bribery Criteria, the FTSE4Good Index consisted of four other criteria sets: the Environmental Criteria, the Social & Stakeholder Criteria, the Human Rights Criteria, and the Supply Chain and Labour Standards Criteria.

 
The Bribery Criteria

“Operating in an open and transparent environment is essential for good business practice, both in the UK and abroad, and the launch of the FTSE4GOOD criteria is another strong step towards improving international business behaviour and combating bribery.  Tackling bribery remains a key component of the UK Government’s efforts to improve governance and sustainable development.”

-Gareth Thomas, UK International Development Minister

The criteria will be implemented into the index series on a phased basis over two years, starting July 1, 2006.  One key challenge is that an estimated 130 companies out of about  200 covered by FTSE that have been identified as having the highest level of exposure to potential bribery, may need to take actions to meet the new criteria, such as putting new policies and management systems in place to mitigate bribery risk.  FTSE’s in-house Responsible Investment Unit will be working with companies to explain the criteria and what they have to do to meet it. 

FTSE has established three levels of bribery risk (high, medium, or low) that are being analyzed in terms of three filters or screens: 1) its sector; 2) the country/countries it operates in; and, 3) its involvement in public contracts.

The countries determined to be at highest risk for bribery are based on the World Bank’s Governance Indicators and the Transparency International Corruption Perceptions Index.

Some of the sectors found to be at the highest risk for bribery were:

Oil and Gas Producers; Oil Equipment, Services, and Distribution; Chemicals; Industrial Metals; Mining; Construction and Materials; Aerospace and Defense; General Industrials; Electronic & Electrical Equipment; Industrial Engineering; Support Services; Electricity; Gas, Water & Multi-Utilities; Pharmaceuticals; Hotels; Fixed Line Telecommunications; Mobile Telecommunications; Software and Computer Services; Technology; Hardware & Equipment.

In order to be rated, a companies’ policy, management, and reporting is measured according to the following criteria:

While these criteria make up the first stage of implementation, the FTSE4Good Committee intends to introduce further criteria for high-risk companies. These include:

On the policy level:

- board-level Commitment made public;
- tranparency of any political donations; and,
- policy applies to business partners.

On the systems level:

- sanctions process for breaches of policy;
- risk based-assessment or risk-led prioritization;
- communicate policy to business partners; and,
- appropriate systems for appointment and remuneration of business partners and intermediaries

For more information please visit: www.ftse.com/ftse4good

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IFC Adopts New Environmental and Social Standards

On February 21, 2006 the International Finance Corporation, the private lending arm of the World Bank, adopted a new set of environmental and social standards. The standards, which replace the IFC's 1998 Safeguard Policies, build upon the environmental and social requirements that the IFC currently applies to private sector projects it finances in the developing world.

The new standards come after an extensive period of public comment and consultation with stakeholders, governments, NGOs, and other members of civil society on updating the safeguards. According to the IFC, this period was triggered both by the realization that the old safeguards had proved inadequate in complex project situations, and by the IFC’s transition to a new business model, which is based on the premise that long-term profitability and strong project outcomes are better secured by companies that manage all of their risks well.

The standards cover more areas than the old safeguards and give those already in place more force and specificity. For instance the standards now require firms to consider the impact projects will have on the wider community's health, safety, and security as well as establish a grievance mechanism for affected communities. The new standards also include a comprehensive approach to labor conditions, which addresses all four core labor standards of the International Labor Organization (forced labor, child labor nondiscrimination, and freedom of association and collective bargaining).

While the old safeguards put special emphasis on assessing the social impact programs have on vulnerable groups, for instance on concerns over involuntary settlement, Indigenous Peoples, and cultural heritage, the new standards add a reference to human rights. In particular, the standards tackle the difficult issues of adequate housing and security of tenure. 

Furthermore, the standards adopt a new outcomes-based approach, which replaces a rules-based system with a principles-based one. According to the IFC, the outcomes-based approach hinges on three policies which it hopes will help clients identify and prepare for the risks intrinsic to their business: 1) developing a clear business model with concrete management systems for handling problems 2) outlining, with help from the community, clear desired outcomes and specific plans of action tailored to the specific project and 3) considering a diverse set of means and maintaining the flexibility that will enable clients to seize new opportunities. 

The IFC is also adopting a new policy structure that more clearly defines and distinguishes between the roles of the IFC and its private sector clients, thereby increasing accountability. The Sustainability Policy outlines the IFC’s responsibilities to project outcomes and communities, while The Performance Standards describe those of its clients. These include clear requirements for public disclosure by clients both at the beginning, and throughout the course of, the project.

The Disclosure Policy identifies and expands on the IFC’s duties to publicly disclose information on its activities and governance. In particular, it creates a request-driven process and internal review mechanism that will enable the public to request and receive information and challenge decisions in an easier and more timely manner. Moreover, the IFC will now regularly post more key internal documents for public scrutiny such as its budget, business plans, minutes from Board meetings, and summaries of project impacts and successes.

Finally, three additional documents, while not IFC policy, will serve as advisory material for clients and IFC staff. These are guidance notes for adhering to the new standards, directions for completing environmental and social reviews, and technical guidance for addressing environment, health, and safety issues.

The Equator Principles are also expected to be updated in accordance with the new IFC standards. These are a set of environmental and social guidelines, based on IFC’s safeguards, that are now applied by 40 leading commercial financial institutions, which collectively represent some 80 percent of global project finance.

Please visit the IFC website for full report.

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Recent News - Pemex Joins UN Global Compact.  Mexico's state oil company Pemex has signed the Global Compact. Pemex’s decision could have a major influence on other Mexican companies and represents a key step forward for the Global Compact, which currently claims to have 2,000 member corporations.

The Global Compact, managed by the United Nations, challenges corporations to strengthen global corporate citizenship by working together with UN agencies, labor and civil society to support its Ten Principles. The Global Compact is a direct initiative of the Secretary-General. It is a purely voluntary initiative with two objectives:

• Mainstream the ten principles in business activities around the world
• Catalyze actions in support of UN goals
  
  

Ten Principles

The Global Compact's ten principles in the areas of human rights, labor, the environment and anti-corruption enjoy universal consensus and are derived from:

• The Universal Declaration of Human Rights
• The International Labour Organization's Declaration on Fundamental Principles and Rights at Work
• The Rio Declaration on Environment and Development
• The United Nations Convention Against Corruption
  
  

The Global Compact asks companies to embrace, support and enact, within their sphere of influence, a set of core values in the areas of human rights, labour standards, the environment, and anti-corruption:

Human Rights

• Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and
• Principle 2: make sure that they are not complicit in human rights abuses.  
  
  

Labour Standards

• Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;
• Principle 4: the elimination of all forms of forced and compulsory labour;
• Principle 5: the effective abolition of child labour; and
• Principle 6: the elimination of discrimination in respect of employment and occupation.  
  
  

Environment

• Principle 7: Businesses should support a precautionary approach to environmental challenges;
• Principle 8: undertake initiatives to promote greater environmental responsibility; and
• Principle 9: encourage the development and diffusion of environmentally friendly technologies   
  
  

Anti-Corruption

Principle 10: Businesses should work against all forms of corruption, including extortion and bribery. 

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