• United Nations Global Compact

(http://www.unglobalcompact.org)

UN Secretary General Kofi Annan initiated the UN Global Compact (GC) on January 31^st, 1999, at the World Economic Forum in Davos. One and a half years later, on July 26^th, 2000, it was launched in New York.

The Global Compact aims at bringing together companies and UN agencies for the shared ambition of a sustainable global economy.

To this end, a network of companies, international labour and civil society organizations, as well as governmental actors is built. This network centres around the Global Compact Office and six UN agencies including the Office of the High Commissioner for Human Rights (UNHCR), the United Nations Environment Programme (UNEP), International Labour Organization (ILO), United Nations Development Programme (UNDP), United Nations Industrial Development Organization (UNIDO), and the United Nations Office on Drugs and Crime (UNODC).

The effectiveness of the Global Compact is ensured by six institutions:

Furthermore, the Foundation for the Global Compact has been brought into being to raise donations and thereby support the work of the GC Office and other activities related to the GC.

Being purely voluntary in character, the Global Compact strives to implement its principles by using the three instruments of:

a) Dialogue (via action oriented regional and international conferences, “policy dialogues” that focus on specific issues related to globalisation),

b) Learning (via presenting practices etc. of the enterprises on the GP-website, as well as local and regional learning activities), and

c) Partnership Projects (of participants, UN institutions and civil organisations).

For commencing official participation, business and other organisations state their willingness to comply with the GC principles in a short letter to the UN Secretary-General. With this letter the sender commits itself to apply the Global Compact Principles to its business practice, management system, and company culture, to publicly advocate the Global Compact, and to issue an annual report on its state and progress regarding the adherence to the framework.

Due to its voluntariness, the Global Compact relies for its implementation on transparency, public accountability, as well as the member companies’ and organisations’ self-interest in adherence to the principles.

The Global Compact’s Ten Principles cover the issues of Human Rights, Labour Standards, Environment and Anti-Corruption.

In detail, these Ten Principles are as follows (Source: http://www.unglobalcompact.org):

• OECD Guidelines for Multinational Enterprises

(www.oecd.org/daf/investment/guidelines)

The OECD Guidelines for Multinational Enterprises were initiated in 1976 by the governments of OECD-member states, and revised in 2000 in cooperation with non-OECD-members, business’ and workers' organisations as well as NGOs.

The Guidelines are structured in 10 chapters. They lay down shared recommendations of OECD-governments for multinational enterprises regarding good practice of economic behaviour on the international level.

The aim of this framework is to promote the positive effects of foreign investment on economic, social and ecological progress of the host country.

To this end the instruments of self-control (by the enterprises themselves) and external control (by workers' representatives, NGOs or the local communities concerned, especially by means of complaints) are used. The Guidelines are based on the principles of voluntariness, have no legal binding character and are not enforced by regulatory means. Compliance to Guidelines is promoted by the signatory governments but they, too, have only an appealing power. Since the 2000 revision came into action, workers’ representatives, communities and NGOs (Non-Governmental Organisations) can issue complaints

The organisational face of the Guidelines consists of:

1. the National Contact Points (NCP) which the signatory countries are obliged to implement. The NCPs are responsible for the promotion of the practice of the Guidelines, the processing of requests, and the reception and verification of complaints on the non-compliance to the Guidelines by enterprises.

2. the Committee on International Investments and Multinational Enterprises (CIME) in Paris. The Committee is responsible for the interpretation of the Guidelines, the surveillance of their effectiveness, and the coordination of the NCPs’ work.

The ten chapters of the Guidelines and their contents are as follows (source: http://www.oecd.org):

I. Concepts and Principles

· This chapter explains the principles and basic ideas behind the Guidelines.

II. General Policies

· Contribution to economic, social and environmental progress with a view to achieving sustainable development, respect human rights, accept local legal provisions and regulations.

III. Disclosure:

· Disclosure of timely, regular, reliable and relevant information regarding enterprises’ activities, structure, financial situation and performance.

IV. Employment and Industrial Relations:

· Elimination of all forms of forced and compulsory labour.

· Freedom of association and collective wage agreements.

· Elimination of discrimination in work life.

· Effective abolition of child work.

· Willingness to engage in constructive negotiations (individually or through employers’ associations), promotion of agreements on employment conditions.

· Provision of information and consultation on issues relevant for reaching agreements on working conditions and issues of mutual concern.

· Employment of local personnel, training of them with a view to improving skill levels, this is done in co-operation with employee representatives and, where appropriate, relevant governmental authorities.

V. Environment:

· Establishment and maintenance of a system of environmental management appropriate to the enterprise, take into consideration in decision-making the foreseeable environmental, health and safety-related impacts associated with the enterprise’s processes, goods and services over their full life cycle, for environment as well as for human beings concerned.

· Elaboration of contingency plans for preventing, mitigating, and controlling serious environmental and health damage, provision of adequate education and training to employees in environmental health and safety matters.

· Continuous search for ways to improve corporate environmental performance and contribution to the development of environmentally meaningful and economically efficient public policy.

VI. Combating bribery:

· No direct or indirect offer, promise, payment or demand of bribe or other undue advantage to obtain or retain business or other improper advantage by the enterprises, and no expectation of enterprises to do so (transparency and management control systems as some instruments to ensure this).

VII. Consumer interests:

· Use of fair business, marketing and advertising practices by the enterprises and initiation of all reasonable steps to ensure the safety and quality of the goods or services they provide.

VIII. Science and Technology:

· Respect for compatibility of enterprises activities to local science and technology policies.

· Adoption, where practicable in the course of their business activities, of practices that permit the transfer and rapid diffusion of technologies and know-how (under protection of intellectual property rights).

IX. Competition:

· Adherence to the rules of free and fair competition.

X. Taxation:

· Contribution to the public finances of host countries by making timely payment of tax liabilities, compliance to tax laws, and provision of all relevant information.

Reporting and Process Standards

• Global Reporting Initiative (GRI) Sustainability Reporting Guidelines

(www.globalreporting.org)

The Global Reporting Initiative was formed in 1997 by the Coalition for Environmentally Responsible Economies (CERES). In 1999, the UNEP joined as a partner. The initiative became a permanent institution in 2002 at the World Summit on Sustainable Development. The third generation of the GRI core Guidelines (G3) was released in October 2006.

GRI is a not-for-profit collaborating centre of UNEP and works in cooperation with the UN Global Compact.

The initiative’s aim is to make reporting on economic, environmental, and social performance – sustainability reporting – by all organizations as routine and as comparable as financial reporting.

It does so by adhering to its core principle of relying on a consensus-seeking multi-stakeholder engagement. This is seen as the most valuable way to produce reporting guidance that is universally applicable and responds appropriately to the stakeholders’ needs.

The GRI's Sustainability Reporting Framework consists of:

The GRI is applicable by organisations of any size, type or region, the core principles have no sectoral specification. (However, specific indicators are developed and published constantly in the “Supplements”: Financial Services, Logistics and Transportation, Mining and Metals, Public Agency, Tour Operators, Telecommunications, and Automotive.)

The reporting guidance - in the form of principles and indicators - is provided as a free public good and is intended for voluntary use by organizations of all sizes, across all sectors, all over the world. GRI develops, continuously improves and builds capacity on the use of the GRI's Sustainability Reporting Framework.

GRI offers to a large extent flexibility in its use, organisations can chose from using only parts of the indicators to reporting “according to GRI framework” or expand the application area.

GRI is not an instrument for the evaluation of an organisation’s behaviour. Rather it is a means of providing the organisation with a stable frame for describing and communicating the results of the implementation of Codes of Conducts, strategies and management systems

As for its governance structure, GRI is embraces:

The GRI Guidelines (G3) consist of the elements:

These elements are considered to be of equal in weight and importance.

The G3 Reporting Principles are in turn divided to two groups:

The Performance Indicators on the other hand refer to the three sustainability sectors:

Therefore there is a total of six Indicator Categories.
While the Principles and the Guidance, along with the Indicator Protocols define HOW economic, environmental, and social performance is reported, the Standard Disclosures and the Sector Supplements define WHAT is reported.

For each of the above mentioned Performance Indicators Indicator Protocols exist: The function of these Protocols is to provide definitions, compilation guidance, and other information that give assistance to those persons responsible for the preparation of the report and ensure consistency in the interpretation of the Performance Indicators. (Users of the Guidelines should also use the Indicator Protocols.)

The GRI Reporting Framework is increasingly recognized as the de facto global standard in sustainability reporting. Nearly 1000 organizations from over 60 countries, from business, civil society, labor, accounting, investors, academics, governments, and others, disclose their sustainability performance with reference to the GRI Guidelines (as in 2006, source: www.globalreporting.org).

• AccountAbility AA 1000 Series (AA1000S)

(www.accountability.org.uk)

Founded by the Institute of Social and Ethical AccountAbility, London, in 1999 as AA1000, the AccountAbility Process Standard is in revision since 2002 and re-organised in the four-fold AA1000 Series (AA1000S). It presents a set of standards and guidelines developed by and for practical use. Its aim is to facilitate the improvement of the sustainability performance of organisations.

The AA1000 Series consists of four individual standards that will successively replace the AA1000 Framework from 1999:

1. AA1000 Assurance Standard (AA1000 AS, published 2003) for social and sustainable reporting, made to improve the credibility of an organisation's sustainability reporting as well as the organisation’s understanding and handling of sustainability issues,

2. AA1000 Stakeholder Engagement Standard (AA1000 SES, 2005), making all stakeholder engagement object of the same disciplines and quality checks as applied to other elements of learning, governance and accountability,

3. AA1000 Purpose and Principles (in development),

4. AA1000 Framework for Integration (in development).

The AA1000 Series is based on eight basic quality principles for Corporate Responsible Management which are in turn grouped together in three subsections under the already mentioned general notion of Inclusivity of all stakeholders:

1. Scope and nature of the process: Completeness, Materiality, and Regularity and Timeliness.

2. Meaningfulness of information: Quality Assurance, Accessibility, and Information Quality

3. Management of process on an on-going basis: Embeddedness, and Continuous Improvement

These principles can be applied to and by all kinds of organisations, large and small, governmental, private and not-for-profit-organisations, on any kind of sector and in any region.

The AA1000 Series Standards are compatible with other standards, e.g. the GRI and standards for financial accounting.

As the AA1000Series aims at addressing sectors previously neglected, it entails no reporting standard, management systems standard or normative performance as such. Rather, it is a generally applicable standard for the overall evaluation, certification and strengthening of credibility and quality of data, processes, behaviour, and competences regarding organisations’ sustainability performance and reporting.

AccountAbility is working together with actors from economy, non-profit-, and scientific organisations as well as consulting organisations, using a multi-stakeholder-approach.

This cooperation is mirrored in the basic principle of the AA1000 Series, the principle of inclusivity. Inclusivity refers to the right of the stakeholders of giving their opinion and the duty of the organisations to respond to this. The more consequent this principle is followed, the better the effects are.

According to the AA1000 Framework an organisation’s accountability is composed of:

1. Transparency (towards all stakeholders),

2. Responsiveness (towards the stakeholders’ concerns), and

3. Compliance (with standards to which it committed itself on a voluntary or its byelaws).

As mentioned above, the AA1000Series aims at implementing and strengthening Corporate Responsible Management in organisations. With its twofold approach it seeks to “close the Credibility Gap". In detail, this means to

a) Strengthen the credibility of social and sustainability reports for organisations by providing a robust and generally applicable assurance process.

b) Improve the responsibility and overall performance of organisations by enhancing the quality of social and ethical accounting, auditing and reporting on organisational responsibilities, the underlying processes, systems and competencies.

A cycle of 5 steps is implemented:

1. Planning

2. Accounting

3. Auditing and Reporting

4. Embedding

5. Stakeholder Dialogue

The gain of all efforts shall be an increased level of trust of the partners involved, as well an improved reputation of the organisations. Moreover, risks attached to the activities can be identified earlier and thereby be reduced.

Glossary