From Global Innovation - Ned Hamson and Bob Holder Capstone Publishing 2002.

What is the Global Compact and what is its impact on global innovation?

Here is a concise statement on what the Global Compact is, drawn from the United Nations web site:

The Global Compact is not a regulatory instrument or code of conduct, but a value-based platform designed to promote institutional learning. It utilizes the power of transparency and dialogue to identify and disseminate good practices based on universal principles.

The Compact encompasses nine such principles, drawn from the Universal Declaration of Human Rights, the ILO's [International Labor Organization] Fundamental Principles on Rights at Work and the Rio Principles on Environment and Development (see Annex I for complete listing). And it asks companies to act on these principles in their own corporate domains. Thus, the Compact promotes good practices by corporations; it does not endorse companies.

So, you say, It's not law, so I don't need to worry about it. Those of you familiar with the growth in registrations for quality management to ISO 9000-2000 standards and environmental standards to ISO 14000, know that once a significant number of big players sign on to a set of principles or standards, they are on their way to becoming a part of the business process.

During the operational phase of the Global Compact was, according to the Global Compact Office, launched at a high-level event at UN Headquarters on 26 July 2000. The meeting, chaired by the Secretary-General, brought together senior executives from some 50 major corporations and the leaders of labor, human rights, environmental and development organizations.

At this meeting, the Chairman and CEO of Nike, Philip Knight said,

"...an internationally recognized set of generally accepted social accounting principles and monitoring organizations certified to measure performance would bring greater clarity to the impact of globalization and the performance of any one company." Philip H. Knight, Chairman & CEO of NIKE, Inc. at the United Nations: NEW YORK, NY (July 26, 2000) Source: http://www.nike.com/nikebiz/news/

We added emphasis to the word certified to show that even at this early date, an industry giant, Nike, would prefer that the Global Compact resemble something like the ISO standards, as that would level the playing field - meaning that everyone would have to meet the same standards in standard operations and as they innovate for the global market.

The Nine Principles of the Global Compact:
(A detailed explanation of these principles can be found at: The Global Compact web site. http://www.unglobalcompact.org/.)

  • The Secretary-General asked world business to support and respect the protection of internationally proclaimed human rights within their sphere of influence.
  • The Secretary-General asked world business to make sure they are not complicit in human rights abuses
  • The Secretary-General asked world business to uphold freedom of association and effective recognition of the right to collective bargaining.
  • The Secretary-General asked world business to promote the elimination of all forms of forced and compulsory labor
  • The Secretary-General asked world business to promote the effective abolition of child labor
  • The Secretary-General asked world business to uphold the elimination of discrimination in respect of employment and occupation
  • The Secretary-General asked world business to support a precautionary approach to environmental challenges.
  • The Secretary-General asked world business to undertake initiatives to promote greater environmental responsibility
  • The Secretary-General asked world business to encourage the development and diffusion of environmentally friendly technologies