The triennial Global Compact Leaders Summit is fast approaching. The Summit not only has clear significance for GC stakeholders and the UN system (serving as the organization’s largest gathering of business leaders), the event also promises to be a milestone in the broad corporate citizenship movement. Why is this so important now? Certainly, it is reassuring that new ways of operating and cooperating across sectors have been forged among enlightened leaders in a relatively short period of time. The case for corporate responsibility is increasingly understood, the arguments are resonating. But, it is clear that this agenda can only have significant impact if it reaches critical mass.

Why do we need scale? It is the belief of the Global Compact that responsible business is the best hope for delivering broad-based development and creating sustainable markets. Goals that are vital in our world – a world bonded together through technology and globalization, yet at the same time increasingly divided by feelings of inequity, protectionism, intolerance and fear. There are stark gaps between the world’s “have's” and “have not’s”. Development insufficiencies are directly linked to threats to global peace and market stability in the 21st century.

Public pension funds with responsibility for large amounts of investment capital are frequently faced with issues regarding the social, moral or political impact of their investments.  These issues range from controversies over specific products (“sin stocks” such as tobacco, guns and alcohol), to issues of corporate responsibility (e.g. environmental sustainability or labour issues), to human rights abuses in the countries in which corporations are doing business. As a large investor, CalPERS has faced many situations where divestment has been advocated. These have been as disparate as South African apartheid to Northern Ireland’s labour practices to the genocide currently occurring in Sudan.  Historically, CalPERS has preferred to address these types of issues by maintaining its holdings and advocating change within the companies, rather than through divestment.

Foreign companies with operations in Sudan are well-positioned to actively assist the efforts of international aid organizations faced with the daunting challenge of providing relief to the millions of displaced persons and refugees. These companies can assist in providing food, water, medicines, shelter and telecommunications – a critical component of the infrastructure for humanitarian relief agencies in Darfur. Rather than divesting, U.S. institutional investors should use the more effective leverage of their equity ownership in these companies to support this critical effort.

The Sudan divestment campaign has emerged as the most significant divestment movement since that directed at South Africa from the late 1970s until apartheid’s demise in the early 1990s. While the current campaign focuses on the genocide and continuing humanitarian crisis in Darfur, it has also renewed the debate over divestment response to such unacceptable situations. There is no question that the humanitarian crisis in Darfur remains grave and demands urgent action on the part of the international community. The challenge now is how best to bring pressure to bear on the government of Sudan in order to prevent further killings and abuses and to undermine its capacity to wage war against its own people.

Is it possible for a company to operate in a country with widespread human rights abuses and yet comply with law, investor expectations, and live up to its own codes of conduct? These questions have gained immediate relevance for businesses operating in Sudan, after the Sudan Divestment Task Force launched its campaign for a “targeted divestment” approach, which is perhaps the most refined contribution to this debate. This article sets out some of the existing options for companies to mitigate negative impacts, after briefly reviewing some of the frequent criticisms raised in particular against oil, mining and gas companies.

The case of Talisman Energy in Sudan and the divestment campaign unleashed against the Company highlights a number of significant issues for consideration, including the power as well as limitation of divestment campaigns. The outcome of the divestment campaign, namely the withdrawal of Talisman from Sudan, raises powerful questions regarding the use of tools such as divestment campaigns in a global context.

On 17 January 2007, the UN Global Compact Office, the Office of the Comptroller of the City of New York and the Principles for Responsible Investment (PRI) convened a meeting on "Responsible Investment in Weak or Conflict-Prone States" which brought together institutional investors, business and civil society. Businesses and Investors provided concrete examples of their learning and experience of dealing with investments in weak or conflict-prone states, particularly the tools used and engagement undertaken. The views of civil society and academics were also sought, especially in the context of ongoing divestment campaigns.

In Russia, the issue of social responsibility of business has in recent years been the subject of quite a substantial, albeit not uncontroversial, evolution. On one hand, there have been enough voluntary moves on the part of the most conscientious and strategically thinking section of private big business in this sphere. On the other hand, CSR-related changes are slow to come among large and medium-sized state companies and companies with predominant state control, as well as with small and medium-sized enterprises. Russian regional and municipal authorities are gradually starting to realize the need for establishing relationships with business on a stable and comprehensive basis. Yet, at the federal government level, there are no empowered bodies or departments, let alone clear state policies, dealing with social responsibility of business. It is crucially important to build up a continual and structured formal dialogue with authorities at all levels, as well as with civil society, on the social impact of business.

On 1 March 2007, the City of San Francisco, the Global Compact, the Bay Area Council and a wide array of San Francisco Bay Area businesses launched the Business Council for Climate Change (BC3), a unique partnership designed to provide meaningful actions that businesses and cities around the world can take to combat global warming. Jared Blumenfeld, Director of San Francisco’s Department of Environment, understands just how important it is to join forces with the business community in order to achieve results on environmental protection. In his conversation with the Compact Quarterly, he outlines numerous practical examples of how the city plans to work with business – from providing incentives to sharing information. Blumenfeld hopes that the new BC3 partnership will help “to level the playing field so that all companies become climate leaders in San Francisco”. He is committed to making BC3 a success in San Francisco, knowing that many other cities around the world, including London and Shanghai, are watching the development of the pilot initiative and hoping to replicate the BC3 model in their own cities.

MAS Holdings is one of Sri Lanka’s largest apparel manufacturers, employing more than 40,700 people in 28 factories in 8 countries. Each year, MAS manufactures 50 million bras and is Victoria’s Secret’s largest supplier. Doing the “right thing” has always been at the core of MAS Holdings’ philosophy. MAS has provided its workforce decent working conditions from its inception two decades ago. With a workforce of almost 90 percent women, and where 80 percent of the product line comprises women’s intimatewear, it considered good business practice to secure the welfare of women within the group and, through them, within the community at large. MAS' "Women Go Beyond” program, launched in 2003, seeks to empower employees and impact communities by championing the cause of women’s empowerment in society. The program also focuses on ensuring employees’ career advancement, strengthening their work-life balance and rewarding excellence.

Since September 2006, the Barcelona Center for the Support of the Global Compact (Barcelona Center) has hosted two Global Compact Progress and Value Workshops. The training is focused on enabling Local Network participants to assist one another in internalizing the ten principles, making an active contribution to UN development goals and preparing Communications on Progress (COPs). Attended by participants from around the world, the workshops bring together Global Compact Network focal points and representatives from business, corporate citizenship organizations and UN agencies. Future workshops are being planned in Bangkok, Buenos Aries, Bratislava, Beijing and Monterrey during 2007.

The Learning Tool is an entry-level e-learning course for companies on Human Rights and Business. It has been developed for the Office of the UN High Commissioner for Human Rights (OHCHR) by the UN System Staff College, in consultation with the Global Compact Office. The tool's objective is to help managers and CSR professionals in companies participating in the Global Compact to understand what human rights are and how they are relevant to their business operations, particularly in relation to the two Compact principles. The current version of tool is a draft, and comments are welcome from all users before 1 June 2007. A final version of the tool will be launched during the Global Compact Leaders Summit on 5-6 July 2007.

The final meeting report is now available for the UN Global Compact’s 4th International Learning Forum Meeting which was convened in Accra, Ghana, in November 2006. The meeting brought together nearly 200 representatives from business, civil society and government to discuss the opportunities and challenges related to implementation of the Global Compact’s ten principles and undertaking partnerships for development.

The founding values of the South African democracy include human dignity, the achievement of equality, the advancement of human rights and freedoms and respect for fundamental principles of democracy. In the pursuance thereof, the national government undertook a massive legislative overhaul, growth-orientated fiscal policies, accelerated service delivery programmes, black economic empowerment initiatives and skills and education programmes. Business has been an integral part of these processes and will continue to be an active partner in promoting sustainable growth and human development.

The Global Compact Network in France has approximately 400 active participants. In 2006, membership grew from 413 to 426 participants, despite the exclusion of 47 enterprises from the network for failure to submit a best practice or Communication on Progress (COP) after four separate warnings. In 2007, 25 new members have already joined. Network members represent many different industry categories and are geographically spread across many provinces, however the majority are small- and medium-sized enterprises. This situation has immediate and important consequences in the management and activities of the network.

Read Local Network news from around the world, including: launches in Armenia, Belarus, Bolivia, Kenya and Moldova; meetings in Nigeria, Mexico, Poland, Georgia and Korea; an MDG-linked project in Spain; the development of a regional hub in Latin America and the Caribbean; and the launch of a new GC website in the UK which could serve as a template for other networks.