Soren Petersen

Local networks were not part of the original plan of the UN Global Compact, but it didn’t take long before the need for local activity became apparent. These networks increasingly perform the important role of rooting the Global Compact principles within different national and cultural contexts, serving to translate global values into something locally meaningful. As it is often expressed: The Global Compact is truly global only because it is local.

When companies join the Global Compact, they are expected to internalize the principles into their business operations, as well as engage in societies. With respect to the second objective of advancing broad societal goals, there has been a clear trend towards collaborative efforts. For example, where companies once used to donate a well, school or hospital to a community, they are now looking for partners to develop more sustainable solutions such as building capacity of local authorities to deliver the needed services. In terms of implementation of the Global Compact principles into business, companies have also shown a desire to join together to learn from others in how to address challenges and dilemmas.

All Global Compact Local Networks are demand driven, and established through local interest and enthusiasm. They are business-led, but must be inclusive of other key stakeholder groups. This is reflected in the definition of Local Networks as “groups of Global Compact participants and interested stakeholders who come together to advance the Global Compact and its principles at the local level”.

Over time, the number of Global Compact signatories in many countries has reached a critical mass needed to establish a Local Network. There are currently over 80 networks that have been established or are emerging.

Local Networks support companies in their efforts to implement the Global Compact, while also creating opportunities for multi-stakeholder engagement and collective action. What we have seen over the years is that these networks increasingly serve as engagement platforms for participants, either for moving innovative solutions upstream for global replication or taking global issues to the level of local implementation.

In 2003, representatives of Local Networks came together for the first time in Bern to discuss fundamental questions and issues linked to Local Network governance and activities.

Among other things, at that first Annual Local Networks Forum (ALNF) it was agreed that the Global Compact Office should provide the necessary guidance, information and tools to networks on matters of common concern, while encouraging governance, organization and activities to emerge based on local specificities.

Despite their wide differences, Global Compact Local Networks have also agreed to certain fundamental characteristics. They are committed to the principles and practices of the UN Global Compact. Every network produces an annual activity report and is willing to support participants in their efforts to develop Communications on Progress. Networks are increasingly called on to find solutions to situations related to the integrity measures.

At this year’s VI Annual Local Network Forum (Bonn, October 2008), over 220 participants from 70 networks joined together and took decisions that resulted in a major leap forward in the evolution of Global Compact Local Networks. They agreed more explicit expectations regarding network performance which includes new elements of accountability and governance.

Also the minimum requirements for Local Networks were supplemented. Networks are now expected to give a mandate to someone to formally represent the network. This is also reflected in the terms of reference for the Annual Local Network Forum, the yearly gathering of the local networks, where a decision making procedure has now been put in place reflecting the need for more transparency and accountability.

Another important addition was the introduction of an annual agreement between the Global Compact Office and each network, which will give the Local Network the “license to operate” for one year based on meeting minimum criteria. Just as corporate CEOs must to renew their commitment to the Global Compact every year through the Communication on Progress, so do Local Networks.

There is no question that Global Compact Local Networks are on a much more robust foundation than they have ever been. They are much more concerned about the quality and the integrity of the initiative and are willing to go further than before to improve and further develop the gains that have been made. To this end, four working groups have been established by Local Networks to report back and provide recommendations to the next ALNF (Istanbul, June 2009) on the following topics:

• Increasing minimum requirements of networks;
• Engaging with micro-enterprises;
• Engaging with civil society organizations; and
• Role of networks in the Communication on Progress policy.

Global Compact Local Networks have become the most important vehicle for facilitating and intensifying a company’s commitment to the Global Compact. They are also increasingly concerned and active caretakers of the Global Compact brand. For reasons of quantity, quality, integrity and accountability, the destiny of the Global Compact initiative is tied to the future development of Local Networks. And that future looks very promising indeed.

Soren Petersen is Head of Networks, Partnerships, Participant Management and Communication on Progress in the Global Compact Office. He joined the Office in 2007, following more than five years with UNDP working with the private sector. He has previously worked with the World Bank, PricewaterhouseCoopers, the European Commission and he is former Associate Professor in International Relations.