What is the UN Global Compact?

The UN Global Compact is the world’s largest corporate sustainability and citizenship initiative, with over 8,000 business and 4,000 non-business participants globally and growing. The UN Global Compact works with business to transform our world, aiming to create a sustainable and inclusive global economy that delivers lasting benefits to all people, communities and markets. It is a call to businesses everywhere to align their operations and strategies with ten universal sustainability principles in the areas of human rights, labour, the environment and anti-corruption, and to support broader societal goals.

The UN Global Compact is both a strategic policy platform for demonstrating corporate sustainability commitment and leadership and a practical framework for businesses to implement sustainable responsible policies and practices. It is also a platform for other stakeholders, such as civil society organisations, business associations and academic institutions, to contribute to dialogue and collective action around corporate sustainability.

The Global Compact is voluntary. It is not a code of conduct, a certification scheme or a compliance initiative and is not legally binding. Instead, it focusses on commitment, engagement and continuous improvement.

Read more here or visit the UN Global Compact website.

What is the Global Compact Network Australia?

The Global Compact Network Australia (GCNA) is the Australian, business-led network of the UN Global Compact.

The GCNA brings together signatories to the UN Global Compact in Australia – including a number of Australia’s leading companies, non-profits and universities – to advance corporate sustainability and the private sector’s contribution to sustainable development.

We do this through a platform for dialogue, learning and influence that is inclusive, practical and leading edge, supporting our companies’ practical implementation efforts and bringing the UN Global Compact to life in the Australian context and wherever Australian companies operate. Through its activities, the GCNA provides a meeting point where organisations can build best practice around sustainability and connect with networks and experts within Australia and globally.

The GCNA was launched in 2009 at Parliament House in Canberra, by then-Minister for Superannuation and Corporate Law, Nick Sherry and Executive Director of the UN Global Compact, Georg Kell. The GCNA has since grown to become one of Australia’s leading corporate sustainability initiatives.

Read more about the Global Compact Network Australia, our members and the benefits of joining.

Who can join the Global Compact?

Participation in the UN Global Compact is open to any business that is genuinely committed to implementing the UN Global Compact’s ten principles and to communicate on its progress each year.

Any properly-constituted business from any sector is eligible to participate, subject to having a minimum of ten employees (see the micro-enterprise policy below). Non-business organisations – civil society organisations / NGOs, academic institutions, business associations, labour organisations, public sector organisations and cities – are also encouraged to become signatories to the UN Global Compact.

The only exceptions are companies involved in the sale, manufacture and distribution of anti-personnel landmines or cluster bombs, companies that are the subject of a UN sanction or that have been blacklisted by UN Procurement for ethical reasons.

The UN Global Compact also has separate policies for micro-enterprises, subsidiaries and tobacco companies:

  • Micro-enterprises: If you have fewer than ten direct employees, due to administrative constraints, you are not able to become a signatory to the UN Global Compact. We do still encourage you to learn about the UN Global Compact, and you are welcome to sign up for GCNA Updates and see upcoming GCNA events.
  • Subsidiaries: If you are a subsidiary of a parent company that is a UN Global Compact signatory, you have two options. In some cases, the parent company’s UN Global Compact commitment applies to all subsidiaries. Other times, subsidiaries can choose to become UN Global Compact signatories alongside their parent company. Either way, you are able become a member of the GCNA.
  • Tobacco companies: The UN Global Compact supports the World Health Organization’s efforts to raise awareness of the serious health effects of tobacco use. While tobacco companies are able to participate in the UN Global Compact, they are not actively encouraged to join, and the UN Global Compact does not accept funding from tobacco companies. Learn more about the UN Global Compact’s tobacco company policy.

Why should we join?

There are many benefits to becoming a UN Global Compact signatory and member of the GCNA:

  • Align your sustainability approach with the world’s largest and UN-backed corporate sustainability framework
  • Collaborate, learn and network
  • Demonstrate leadership and profile your achievements
  • Shape the conversation
  • Access tools, resources and templates
  • Participate in GCNA governance
  • Connect with networks, participants and experts within Australia and globally

For more information on why you should join, see here.

We already have a corporate sustainability / CSR strategy or program in place. What would engaging with the Global Compact add?

The UN Global Compact is not a corporate sustainability policy or strategy in itself, and does not replace these. Rather, it offers a policy framework – based on universal sustainability principles – for developing and implementing such strategies and aligning them with global best practice.

So, signing up to the UN Global Compact allows a company to tell its sustainability story through a global, best practice, UN-backed framework, and provides a platform to share best and emerging practice locally and globally.

What will we have to do if we sign up?

The UN Global Compact is not a compliance initiative, but focusses on continuous improvement and engagement. Companies that sign up to the UN Global Compact are expected to:

  • set in motion changes to business operations so that the UN Global Compact and its principles become part of strategy, culture and day-to-day operations;
  • publicly advocate the UN Global Compact and its principles; and
  • annually communicate on progress in implementing the UN Global Compact’s ten principles through a public report (e.g., sustainability or annual report).

However, while the Global Compact expects companies to take actions to implement the principles, it is not prescriptive about how companies should do this or what those actions should be.

After the Signature: A Guide to Engagement in the Global Compact outlines the commitment companies make when signing up to the UN Global Compact and provides some suggested implementation steps.

Is the Global Compact legally binding?

No. The UN Global Compact is a purely voluntary initiative, is not compliance based and is not prescriptive in terms of how companies implement the principles. It does not police or enforce the behaviour or actions of companies. Rather, it is designed to stimulate change and promote good corporate citizenship, and encourage dialogue, innovative solutions and partnerships.

Safeguarding the reputation, integrity and good efforts of the UN Global Compact and its participants requires transparent means to handle credible allegations of systematic or egregious abuse of the UN Global Compact’s overall aims and principles.

The UN Global Compact’s website has more information on the initiative’s integrity measures.

What are the UN Global Compact’s reporting requirements?

Business signatories must report annually on how they are implementing the Global Compact and its principles, in a Communication on Progress (“COP”). The COP needs to contain, at a minimum:

  • a statement by the chief executive expressing continued support for the Global Compact and renewing the company’s ongoing commitment to the initiative and its principles;
  • a description of practical actions (i.e., disclosure of any relevant policies, procedures, activities) that the company has taken (or plans to undertake) to implement the Global Compact principles in each of the four issue areas (human rights, labour, environment, anti-corruption). (In cases where a COP does not address one or more of the four issue areas, an explanation must be provided (“report or explain”).); and
  • a measurement of outcomes (i.e., the degree to which targets/performance indicators were met, or other qualitative or quantitative measurements of results).

For companies that already prepare a sustainability report or annual report, these COP requirements can be incorporated into those publications.

COPs are uploaded to the UN Global Compact website, and are publicly available. Further information about the reporting requirements for business signatories is available here.

Note for SMEs and companies that do not already produce a sustainability report: The COP can be a straightforward document, and need not be prohibitively time consuming. Contact us for examples of COPs from other Australian SMEs to give you an idea of what’s required.

Non-business signatories are required to submit a Communication on Engagement (“COE”) every two years. The COE has similar requirements to the COP, but contains a description of actions taken to support the Global Compact principles and engage with the initiative.

Further information about the reporting requirements for non-business signatories is available here.

The Global Compact Network Australia can provide guidance and examples to members on preparing their COPs or COEs.

We’re an SME – how is this relevant for us? Isn’t it just for big business?

Sustainability is not just for big business, and the Global Compact counts thousands of SMEs in its participant base.

As the Global Compact is a principles-based initiative, it has relevance to and can be implemented by companies of all sizes, across all sectors and regardless of whether you are operating domestically or internationally.

Are we ready to sign up?

Yes! Engaging with the Global Compact offers benefits regardless of whether your company is already a sustainability leader or just at the beginning of its sustainability journey.

If you are a sustainability leader, the Global Compact offers you opportunities to demonstrate and profile your leadership, connect with other leaders within Australia and globally and participate in global leadership platforms that will help you stay ahead of the sustainability curve.

For those who are still learning about what sustainability means for their company, who are new to a particular aspect of the Global Compact framework or who have faced or are facing a sustainability-related challenge, engaging with the Global Compact is a great step to demonstrate a genuine commitment to engaging with the issues, learning and improving performance. It also provides opportunities to learn from sustainability leaders who have done it before.

The Global Compact expects companies to take actions in line with their commitment, but is not prescriptive about how companies should do this or what those actions should be. A first step could be engaging with the Global Compact Network Australia to build your company’s understanding of its sustainability risks and opportunities.

Further, your company may well already be taking action in more ways than you realise to support the Global Compact principles. For example, you might have health and safety programs or strong labour practices (human rights and labour principles) or a community investment program or a Reconciliation Action Plan (human rights). You might have developed production processes to reduce your company’s environmental footprint (environment principles). Or, a code of conduct may set out the company’s approach to bribery (anti-corruption).

We would be happy to take you through what signing up would mean for your company – please contact us.

How much will it cost?

For further information on benefits and fees, see here.

How do we join?

There are two key steps to engaging with us:

  • Become a signatory to the UN Global Compact
  • Become a member of the Global Compact Network Australia
  • For details on each of these steps, see here.

What sort of activities can Global Compact Network Australia members get involved in?

The Global Compact Network Australia hosts a range of exclusive member-only events and provides access to Australian and global thought-leaders on corporate sustainability issues. See our upcoming events here.

Representatives of GCNA members can also get involved in our Leadership Group Steering Committees and working groups.

From time to time, positions on our Board also become available to representatives from member organisations

How is the integrity of the initiative maintained?

The UN Global Compact’s website contains information on the initiative’s integrity measures.