UN history - a giant opens up

Most people are unaware that the private sector was a strong supporter of the creation of the United Nations and that many business representatives were present when the Charter was drawn up in 1945. The role of business is recognised in Article
55 of the Charter as promoting “higher standards of living, full employment and conditions of economic and social progress and development.”

However, with the onset of the Cold War, relations between the UN and business changed to one of mistrust and suspicion. Business viewed the UN as an extended arm of governments whose only objective was to advance more regulation. On the
other hand, the UN distanced itself from business, seeking to remain neutral to the conflicting ideologies of the Cold War. This largely remained the relationship for several decades.

As the Cold War ended, the door opened to reconciliation of interests. This coincided with business facing a host of new risks and responsibilities in the areas of human rights, labour conditions, environmental protection, social inclusion, and
good governance – areas typically associated with the UN. At the same time, the UN needed to involve the private sector to stay relevant, maximise its influence and access the skills and resources of companies. This marked the beginning of a new era of collaboration between the UN and business.

The Global Compact was created as a result of a landmark speech made by former Secretary-General Kofi Annan at the World Economic Forum in 1999:

“I propose that you, the business leaders gathered in Davos, and we, the United Nations, initiate a global compact of shared values and principles, which will give a human face to the global market.”

Immediately, informal discussions began between business and the UN to explore the possibility of establishing a multi-stakeholder initiative. At historic meeting of 100 representatives from business, civil society and the UN, hosted by Lord Browne, CEO of BP, it was clear that significant labour and civil society organisations were willing to engage with business and had the appetite to embark on the initiative.

Moreover, it was also decided that learning, dialogue and partnerships would underpin the way that the initiative would operate.

The formal launch of the Global Compact was held on 26 July 2000 at the UN, bringing together 44 global companies, two labour and 12 civil society organisations, as well as 6 business associations. The announcement proved to be controversial. A number of organisations in civil society were extremely critical, accusing the companies of ‘blue-washing’, and denouncing the UN for collaborating with big business that had been accused of severe human rights abuses in many parts of the world.

However, the launch firmly established the Global Compact. A number of UN member states, in particular the UK and Swiss governments, voiced their support for the initiative from the outset. They also provided the critical early funding needed
to get the initiative off the ground. At the launch, the idea of Local Networks was born, and the first network was planned for in India.

The Global Compact was primarily thought of as an instrument to fill the governance voids of the time – the neglect of human rights, social and environmental issues relative to economic rule making. The fundamental idea was that by embedding universal values in markets, the Global Compact would help reconnect markets with communities, avoid the emerging backlash against globalisation and correct some of the fundamental imbalances that were at the root of the problem. Based on enlightened self-interest, business – the main drivers and
beneficiaries of globalisation – was asked to help by integrating UN principles in their business strategy and operations.

In many respects, the United Nations Global Compact is as relevant today, as it was then.

“When the initial speech was prepared, we had
no plans to build an initiative. Building the UN’s
first public-private, global-local and network
based organisation was hard work. We started
with a bold idea without knowing how to act
upon it. The early days were a struggle - we
knew that learning, dialogue, and partnership
was the way to go, but we had no idea how. We
could not imagine then that an idea would grow
into a global movement.”