Cassandra-like predictions that the global economic crisis would force most UN-business partnerships to significantly reduce their activities have not yet come true. While it is certainly too early to assess the overall impact of the crisis on the partnership agenda, a number of trends have emerged:

First, the current crisis is obviously a huge issue for all UN Agencies, Funds and Programmes. Practically all UN private sector focal points we have spoken to view the global economic downturn as the biggest challenge partnerships have to deal with today. Many expect a drop in philanthropic giving. While most agencies report that their corporate partners are continuing their commitments, some state that they find it more difficult to initiate new partnerships.

Second, despite these difficulties, the crisis has a surprisingly positive side-effect in the context of partnerships:  it seems to provide an extra incentive to find more creative ways of engagement. For example, those agencies that have previously focused on fundraising partnerships are increasingly trying to mobilize core competencies of the private sector, influence corporate behavior through advocacy as well as assist companies in improving the quality of their Corporate Social Responsibility (CSR) programs. Therefore, the crisis has the positive effect of encouraging innovation.

The perceptions of UN private sector focal points mirror external research on the future of CSR. Even though many companies have to reduce their overall spending on CSR, the crisis has thus far not resulted in a reversion of long-term engagement. Cuts have mainly affected philanthropic budgets and projects not connected to core business interests. The majority of companies that have integrated CSR into their overall business strategy stay engaged - and they have good reasons to do so. First, it would be unreasonable to end means of engagement that make perfect business sense. Second, serious commitment helps companies enhance their reputations. Today, this is more important than ever, because the private sector is widely held responsible for the crisis. Third, consumer interest in a company’s CSR efforts seems to remain consistent. Finally, many companies have invested much time and money to get staff involved and any back-pedaling now would make their engagement seem dishonest.

Rather than undermining CSR, therefore, the current economic crisis seems set to bolster it. Analysts and practitioners are more strongly recognizing the importance of sustainable business practices, comprehensive risk management, long-term performance and ethics. Recent research shows that company attention to environmental, social and governance issues has a positive effect on company performance and long-term value. Mainstream financial investors are therefore increasingly taking these aspects into account when making investment decisions.

In sum, the global economic crisis will most likely not have a negative impact on UN/business partnerships. While the crisis leads to a reduction of philanthropic giving, it triggers innovative partnerships and may have a cathartic effect on more conventional ones, eliminating those that would not have been sustainable anyway. Moreover, the crisis supports a stronger recognition that sustainable business practices are critical for long-term business success and thus prepares the ground for broader private sector engagement in support of the UN’s goals and values.

For more information, please contact Julia Steets or Kristina Thomsen, Global Public Policy Institute (GPPi), Berlin.