Why Rio+20 Was Still a Success – the Contribution of Business and Academic Institutions in Support of Sustainable Development and the Rio+20 Process

by Jonas Haertle

On my first day after returning from the Rio+20 conference – officially the UN Conference on Sustainable Development which took place 20 years after the 1992 Rio Earth Summit – I spoke to a group of MBA students at Fordham University in New York. Admittedly, the instructor had asked the class to read about the Rio+20 outcomes prior to the session, but I sensed there was a genuine interest to hear what I thought about the outcomes of the weeklong series of events in Rio de Janeiro.

Quite obviously, the main headlines and media stories about Rio+20 focused on the outcomes of the government negotiations. Many stakeholders, foremost NGOs and the media, but also some government representatives, felt that the official outcome document The Future We Want had fallen short of the expectations in light of the environmental and social challenges we face. Many had expected or hoped for more concrete and ambitious decisions by governments. And although the outcome document includes some important decisions (for example, to launch the process to create Sustainable Development Goals which are supposed to come into effect in 2015 when the Millennium Development Goals expire; the decision to take action on ocean acidification, fishing subsidies and overfishing to reverse the decline of oceans; and the decision to strengthen the UN Environment Programme), many observers criticized that the 193 UN member states had missed an important opportunity to agree on a more ambitious plan of actions.

However, apart from the government negotiations, many other stakeholder groups met at Rio+20 and  committed to far-reaching actions in support of Rio+20′s objectives. Here are some of the outcomes which you might not have read or heard about:

Prior to the arrival of heads of states and governments for the “official” part of Rio+20, close to 50.000 people representing NGOs, farmers, youth, scientists, business, academia and other sectors convened for numerous action-oriented meetings.

For example, the UN Global Compact, in cooperation with the Rio+20 Secretariat, the UN System and the Global Compact Local Network Brazil, convened more than 2,500 participants for the Rio+20 Corporate Sustainability Forum. In over 100 sessions participants discussed how business representing all sectors and based in all parts of the world can help to make sustainable development a reality through their own actions. While business was at the sidelines of the original Rio 1992 Earth Summit, the 2012 Rio meeting clearly showed that businesses are committed to sustainable development. More than 200 concrete commitments for sustainable development were made by companies. Obviously, it is necessary that governments, in light of these commitments, also take further steps to incentivize the right behavior, for example through embedding environmental and social considerations into legal frameworks. For instance, the UK government announced that it would require all publicly listed companies in the UK to report on their carbon footprint as of next year. This is a step into the right direction.

Another group of actors which was clearly more visible at this year’s Rio+20 conference was the academic sector.

Similar to the businesses, academic institutions were all but absent from the original Rio 1992 Earth Summit. At Rio+20, the 3^rd Global Forum for Responsible Management Education of the PRME initiative was convened as the official meeting for management-related Higher Education Institutions (HEIs). While the PRME initiative provides an ongoing platform for dialog and action for the growing community of academic institutions and stakeholders committed to sustainable development, this year’s 3^rd Global Forum clearly marked a new stage in PRME’s evolution. Five years after the initiative’s launch, participants at the 3^rd Global Forum agreed on a concrete strategy to help develop the initiative further for the years to come. Apart from individual steps which each PRME signatory school committed to take, some of the main recommendations for PRME as an initiative are to form a leadership group to incentivize the most engaged PRME signatory schools to go further in their implementation of sustainability principles while keeping the initiative open to institutions at all levels of engagement; to delist those signatories that fail to regularly share information on progress made in implementing PRME in order to increase the accountability of the commitment to the Principles; and to launch PRME chapters to better engage management education communities on a local and regional level. One of the objectives of the Global Forum was to give a voice to PRME signatory schools. The agreement by participants on the Rio Declaration on the Contribution of Higher Education Institutions and Management Schools to The Future We Want: A Roadmap for Management Education to 2020 showed that the Global Forum successfully provided this opportunity.

Further, based on the discussions of last year’s PRME Summit in Brussels, another objective of this year’s Global Forum was to highlight the role of external stakeholders on management education. In that regard, I was encouraged to see the frank discussion among representatives of accreditation bodies, namely AACSB, EFMD and AMBA, about the ways they are planning to embed sustainability criteria into accreditation. Also, the statement by Della Bradshaw who is responsible for the Financial Time’s business school ranking made clear that we have to encourage more schools to put greater emphasis on sustainability issues in curriculum and research so that the FT’s and other ranking systems gradually adapt to reflect responsible education and research in the ranking criteria for business schools.

Finally, the majority of participants I spoke to after the Global Forum said that they had gained some new insights as to how to further enable responsible management and leadership education as well as research in their institutions. Many told me about the new insights they had gained during coffee breaks and at the round table discussions with other participants. It is good to hear that the meeting method, which was based on a pragmatic inquiry, was so well received. Going forward, on behalf of the PRME Secretariat, we are committed to support and to work with many people in the PRME community to make the promising proposals at the Global Forum a reality.

While the 3^rd Global Forum for Responsible Management Education was not the only forum at Rio+20 for academic institutions, the presence of the over 300 leaders and representatives of Higher Education Institutions and business schools contributed to the fact that the UN leadership clearly took notice of the role that educational institutions have in enabling sustainable development. One of the other driving forces for this was the Higher Education Sustainability Initiative. Together with UN organizations dedicated to educations for sustainable development (UNESCO, UNEP, and UNU), and with the technical support by Euromed Marseille, the UN Global Compact and the PRME Secretariat had invited higher education institutions to sign up to a declaration on higher education and sustainable development and to make concrete commitments in support of Rio+20. At the close of Rio+20 almost one third of all voluntary commitments at Rio+20 were received through this initiative, i.e. from academic institutions. I will probably never forget the moment, while already in Rio, when the office of the Rio+20 Executive Coordinators called me to ask if we could provide on a very short notice a speaker from one of the academic institutions which had signed the declaration for the official Rio+20 closing press conference. It was fitting that Antonio Freitas of FGV Rio, one of the leading business schools in Brazil, participated in this press conference on behalf of the initiative, as he, in his previous role as a member of Brazil’s National Commission for Higher Education (CNE), had successfully advised the Government of Brazil to pass a law that will require the entry level exams for all university students in Brazil to include questions on sustainability. The law had been passed a few days prior to Rio+20 and had been announced in presence of Brazil’s Secretary of Education at the PRME Global Forum. As another direct outcome of the Higher Education Sustainability Initiative, UNESCO agreed with the Global Compact Office and the PRME Secretariat to continue to collaborate on this initiative.

What did Governments agree on regarding the role of education?

The official outcomes document stresses the important role of Education for Sustainable Development (ESD) to enable the necessary transition to sustainable development. Further, governments agreed to advocate ESD beyond 2014 which is when the Decade for Education for Sustainable Development will officially expire. My hope is that ESD will be an important building block of the Sustainable Development Goals which governments agreed to develop by 2015. For academic institutions engaged in PRME this would mean that their actions are directly aligned with the UN’s goals on Education for Sustainable Development.

To sum up, while I think that criticism of the relatively low level of ambition in the outcome document of governments at Rio+20 is justified, I also believe that one equally important aspect of Rio+20 were the discussions and agreements by the many non-governmental stakeholders. In a way, Rio+20 made clear that the world’s most pressing challenges can only be solved through better cooperation and collaboration between governments and non-governmental stakeholders and by giving a greater role to the latter in upcoming UN conferences on global issues. Governments clearly have an important role to play, most importantly by agreeing on global governance frameworks. However, as Rio+20 made clear, currently there is little to no political will to agree on far-reaching decisions on a global level between governments.  Yet, if we consider the countless non-governmental stakeholders present in Rio and the commitments many of them made to advance sustainable development in their own spheres of influence, I believe that Rio+20 actually had a positive effect.

Jonas Haertle is Head of the PRME Secretariat in the UN Global Compact Office.

More than 2,000 Companies Expelled for Non-reporting

The Global Compact Office announced today that the number of companies expelled from the initiative for repeated failure to communicate on progress in the implementation of the Global Compact principles has passed 2,000. We’ll provide an update soon with a more detailed breakdown of those that have been expelled so far.

10 Years of Setting the Record Straight

In an ill-informed opinion piece (“UN Global Compact: Ten years of greenwashing?”) published in Ethical Corporate Magazine and released on the EC website on 3 November, Jon Entine sets forth a wild array of unsubstantiated claims about the Global Compact that cannot go unchallenged.

Let’s start with some simple corrections. First off, the Global Compact currently has 8,700 participants, roughly 6,200 of which are businesses of all sizes and sectors. It is not one of the initiative’s “key requirements” to “pony up dues”, as Mr. Entine writes. A financial contribution to the Foundation for the Global Compact is entirely voluntary, and the Global Compact Office does not in any way penalize companies that choose not to contribute.

The annual Communication on Progress (COP), which has evolved as the initiative’s central instrument to advance transparency and accountability, is indeed obligatory. But far from mandating “an extraordinarily low level of disclosure”, the COP process offers different levels of reporting, acknowledging that companies of different sectors, sizes and regions find themselves at very different stages of sustainability performance. Our aim has been to offer a manageable entry point to disclosure, with a gradual trajectory towards more comprehensive and material reporting by advanced performers. The COP requirement is strictly enforced and to date, nearly 2,000 companies have been expelled from the Global Compact for repeated failure to disclose information on the performance.

As a voluntary initiative, it is neither within the Global Compact’s mandate nor mission to monitor or enforce corporate performance. However, to suggest that businesses in the Global Compact do not have to act on their commitment is patently absurd. For one, it ignores that the Global Compact does not shroud its work – or the actions of its participants – in secrecy. All corporate reports are placed in the public domain, and over the years, we have seen a variety of actors – civil society organizations, investors, media – take great interest in the substantive information released by corporations. This concept of “social vetting” is an important cornerstone of our work, and it has, in numerous instances, helped separate true sustainability leaders from those where closer scrutiny revealed that corporate practice fell short of the commitment to the Global Compact principles. The bottom line: the Global Compact does not operate in isolation, its success depends to a large degree on stakeholder feedback and engagement. 

Further, Mr. Entine conflates fact and fiction in his description of the case of PetroChina and CNPC that was raised with the Global Compact Office in 2008/2009. Once again, it should be noted that Petrochina is a Global Compact participant, while CNPC, its parent company, is not. At the same time, Petrochina does not operate in Sudan, while CNPC does. The Global Compact Office has explained its position on this case on several occasions and in great detail, and the Global Compact Board has affirmed in July 2009 that no action under the Global Compact’s integrity measures was warranted.

Despite the fact that CNPC is not a Global Compact participant, the company has actively participated in our work on responsible business in conflict-affected countries, particularly Sudan. This eventually led to the establishment of Global Compact Local Network in Sudan and the development of concrete and practical guidance for responsible business and investment in conflict zones.

The Global Compact has never suggested that “it is accomplishment enough being a member of the world’s largest club of well-intentioned corporations”, as Mr. Entine seems to think. To the contrary, we have frequently explained that a commitment to the Global Compact expresses an aspiration to achieve greater sustainability. We expect our participants to undertake every effort to improve their environmental and social performance, and we offer much assistance along the way. That is the Global Compact’s central mission. It is not a seal of approval or a regulatory body. In his shallow analysis of the initiative, Mr. Entine simply tries to assign a role to the Global Compact which it never had. Likewise, Bart Slob, cited by Mr. Entine, continues to bark up the wrong tree. The Global Compact, as a voluntary initiative to advance responsible business practice, is not a substitute for effective regulation. We have created a viable place for innovation and experimentation and a working organizing framework for companies operating in wildly differing operating environments.

On to Drs. Sethi and Schepers. To our knowledge, the paper cited by Mr. Entine has not yet been formally published, yet it has apparently been circulating among a number of people and organizations. The Global Compact Office will, in due time, respond in greater detail to the impressive array of inaccuracies presented in this paper. Obviously, the authors willfully ignore much of the Global Compact’s evolution during the past ten years, instead presenting a self-indulgent series of rhetorical salvos. We have shared some of our substantive concerns about the paper with Mr. Entine, which he chose to ignore.

A Case for Better Headlines?

Over at the Wall Street Journal, Professor Aneel Karnani of the University of Michigan’s School of Business created quite a stir last Tuesday, attempting to argue “the case against corporate social responsibility”.

To be fair, it is doubtful that the essay’s provocative headline was chosen by Karnani himself. One surmises that this was the work of the WSJ’s editors, eager to stir the pot a little. Mission accomplished.

But headlines aside, Karnani’s forceful opening salvo quickly disintegrates. The greatest flaw of his argument lies in the old saw that responsibility and profitability are, for the most part, mutually exclusive concepts and that appeals for greater responsibility ultimately undermine any other avenue available to “strike a balance between profits and the public good”. Karnani fails to present any supporting evidence, but the truth is that awareness of material risks and opportunities (“financial calculations”, in Karnani’s words), voluntary action (“self-restraint”), civil society pressure (“watchdogs and advocates”) and regulation are all part of the mix. There are circumstances where none may be sufficient on its own to drive real change, but understanding corporate responsibility also means understanding their complementarities.

A good example is the large number of countries that are – for a variety of reasons – unable or unwilling to introduce or enforce effective regulation. In these regulatory voids, corporate responsibility can serve as an indispensable organizing principle to avert disaster. Why? Because companies have real choices to make: they can join the race to the bottom or they can uphold what they believe to be universally applicable principles of good behavior. No doubt, too many still choose the former (and get away with it), but the choice (and risk) is both moral and material: today’s cell phone video of poor working conditions can easily become tomorrow’s headline, often triggering a fateful sequence of negative consequences, from civil society protests to consumer boycotts to investor action, litigation and stricter regulation at home. Increasingly, principles and profits are two side of the same coin.

More reactions to Professor Karnani’s essay here, here, here and here.
Update: Professor Karnani’s response to critics and supporters.

Matten’s Take – The Wrap-Up

For a concluding perspective by Prof. Dirk Matten, the official blogger of the Leaders Summit, visit his excellent blog.

Global Compact Leaders Summit Issues New York Declaration by Business

In the Leaders Summit’s closing session today, Global Compact participants adopted, by acclamation, a “New York Declaration by Business”, pledging to renew their commitment to the Global Compact principles, deepen their engagement, strengthen their support for critical development goals, and increase transparency and dialogue. The Declaration further calls on governments to “cultivate enabling environments for entrepreneurship and innovation” and to set clear regulatory signals, especially on climate change.

Download the New York Declaration by Business.

GRI and UN Global Compact Join Forces in New Alliance

The world’s two largest corporate social responsibility initiatives forged an alliance to help build a universal standard on corporate sustainability and disclosure. The alliance hopes to transform business practices on a global scale.

Under the terms of the Memorandum of Understanding, GRI, which is subject to due process, will integrate the Global Compact’s 10 principles and issues in its next Sustainability Reporting Guidelines. Similarly, the Global Compact will use the GRI Guidelines as the recommended framework for companies to communicate on progress.

Together, the two initiatives hope to provide companies with clear direction to sustainable performance and transparency.

Read the specific commitments of the alliance here.

Speeches and Statements – Leaders Summit Day 1 (24 June)

Earlier today, the UN released the official transcript of UN Secretary-General Ban Ki-moon’s opening address to the Global Compact Leaders Summit. Also available: the Secretary-General’s remarks at the press conference following the opening session. To follow the webcast of today’s meeting, including Mayor Bloomberg’s speech, visit the UN webcast site for the Leaders Summit.

Matten’s Perspective

Prof. Dirk Matten, the Leaders Summit’s official guest blogger, has spent day a hard day’s work following plenary sessions, press briefings, roundtable discussions and side events. To read his take on the Summit, visit the Crane and Matten blog.

UN Secretary-General Opens Proceedings Along with Mayor Bloomberg

(Photo: UN Global Compact/Paulo Filgueiras)

More than 1,200 corporate leaders from around the world convened today in New York City for the tenth anniversary of The UN Global Compact Leaders Summit. The two-day summit was kicked off by UN Secretary-General Ban Ki-moon and New York City Mayor Michael Bloomberg.

In his address, The Secretary General urged the business, civil society and government leaders to lead a “race to the top”, embracing openness, anchoring profit-making in social principles and favouring long-term horizons over pursuit of short-term profits.

Mayor Bloomberg – noting that he was speaking as a former CEO as well as an elected official – said that good corporate citizens recognize that support for human rights is in their enlightened self interest.

Watch the live webcast.

Read today’s complete announcement.

Businesses Asked to Help Protect and Promote Children’s Rights

At the UN Global Compact Leaders Summit, UNICEF, the UN Global Compact and Save the Children called on the business community to work together to build universal principles that will place children’s rights at the top of the global corporate responsibility agenda.

The three organizations are asking business leaders to work with them to develop principles – to be known as the Children’s Principles for Business – so that they can avoid the negative impacts that their activities may have on children, and contribute to a better future for everyone.

Watch the live webcast.

Read today’s complete announcement.

Leaders Summit Official Broadcast Partner CNBC to Host First-ever Live Broadcast from the Floor of the UN General Assembly

As the Official Broadcast partner of the UN Global Compact Leaders Summit, leading business cable network CNBC will broadcast a live special “CNBC Global Summit: The World’s Financial Future”—the first-ever live show from the floor of the UN General Assembly at 8 p.m. tonight.

From CNBC:  “Hosted by CNBC’s Erin Burnett, the special will bring together world business leaders to provide insight on topics such as the future of oil; whether BRIC nations can still be the growth engines they once were and continue to lead the way; and what CEOs think is a critical factor to the future success of their companies.”

Secretary-General Ban Ki-moon is the keynote guest for the program, which will be hosted by anchor Erin Burnett. Other Summit participants who will appear on the program include Jamshed Irani, Director of Tata Sons; Andrei Galaev, CEO of Sakhalin Energy; Martha Tilaar of The Martha Tilaar Company; and Antonio De Abreau, CEO of EDP Brazil.

CNBC’s coverage of the Summit will continue throughout the Global Compact Leaders Summit on Thursday, 24 June.

UN Global Compact and Accenture Release Findings of Largest CEO Study on Corporate Sustainability

In advance of the Leaders Summit to be held this week in New York, the United Nations Global Compact and Accenture have released findings of a survey of over 766 CEOs around the globe – the largest research study of top executives ever conducted on sustainability.

In response to the survey, an overwhelming majority of corporate CEOs – 93 percent – say that sustainability is critical to the future success of their companies—in spite of the recent economic downturn.  CEOs also believe that, within a decade, a tipping point could be reached that fully meshes sustainability with core business – its capabilities, processes and systems, and throughout global supply chains and subsidiaries.

In addition to an online survey, the study included extensive interviews with 50 of the world’s leading CEOs.

Read today’s complete announcement.

Download the entire survey here –  A New Era of Sustainability: UN Global Compact-Accenture CEO Study 2010.

Leaders Summit 2010: The Countdown Begins

With just a few days until the UN Global Compact Leaders Summit 2010 convenes in New York City, registration has closed and more than 1,200 executives from nearly 100 countries are confirmed to attend this historic event. Final preparations are being made, including a number of exciting side events to take place at the Marriott Marquis Hotel in Times Square and other locations.

Already, the first two of an array of new resources have been launched – the 10th anniversary edition of the Global Compact Annual Review and the Global Compact Management Model, developed in collaboration with Deloitte.

In addition, widely acclaimed author and blogger Dirk Matten will serve as an official Summit blogger, delivering independent coverage and analysis through the highly respected Crane and Matten Blog. An expert on issues of corporate social responsibility, Professor Matten holds the Hewlett-Packard Chair in Corporate Social Responsibility and is a Professor of Strategy at the Schulich School of Business (York University, Toronto), which is ranked number one globally by the Aspen Institute for integrating issues of social and environmental stewardship into curricula and research. Dirk was recently ranked among the ‘Top 100 CSR Leaders’ globally in an independent poll by the Cambridge based think tank CSR International.

As a reminder, for those unable to participate in person, the Leaders Summit will be streamed live on the UN Webcast site and here on the Global Compact blog. You can also follow the Summit on Twitter (#GCLS2010) and Facebook.

GC Annual Review Reveals CSR Remains High on Business Agenda Despite Economic Downturn

UN Photo/Mark Garten

At a press briefing today before the UN press corps, Global Compact Executive Director Georg Kell introduced the 10th Anniversary Edition of the Global Compact Annual Review. Major findings of the Review are that the financial crisis and subsequent economic downturn appear not to have slowed down efforts to advance responsible business conduct, while global challenges like corruption or human rights remain severely neglected.

The Annual Review is based on a survey of 1,044 businesses in 97 countries, representing nearly 20 percent of all Global Compact participants at the time. The 2009 Implementation Survey is one of the largest, most comprehensive studies on global corporate responsibility implementation.

For more key findings read today’s complete announcement or download an advance copy of the Annual Review. Final copies of the Annual Review will be available at the Global Compact Leaders Summit 2010, to be held in New York on 24-25 June.