A Management Model for Sustainability

The participants of the United Nations Global Compact, a corporate-social-responsibility initiative launched by the UN in 2000, recently partnered with the management consulting firm Deloitte to provide a management model that businesses can use as framework for implementation of the sustainability principles of the UN Global Compact.

The UN Global Compact is a leadership platform, endorsed by chief executive officers to serve as strategic platform for participants to advance their commitments to sustainability and corporate citizenship. The compact has more than 7700 corporate participants in more than 130 countries and is structured as a joint public and private initiative. It serves as a policy framework for the development, implementation, and disclosure of sustainability principles and practices by offering participants specialized work streams, management tools, resources, and topical programs and projects to help advance sustainable business models and markets as part of a broader goal to build a more sustainable and inclusive global economy, according to the UN. The UN Global Compact has two objectives: mainstream 10 UN principles evolving human rights, labor, the environment, and anticorruption in business activities around the world and to catalyze actions in support of broader UN goals, including the Millennium Development Goals, which are eight major objectives of the UN and UN member states to address the needs of poor countries.

The 10 principles of the UN Global Compact are divided into four main areas: human rights, labor, environment, and anticorruption as outlined below:
  • Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights
  • Principle 2: Businesses should make sure that they are not complicit in human rights abuses
  • Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining
  • Principle 4: Businesses should support the elimination of all forms of forced and compulsory labor
  • Principle 5: Business should support the effective abolition of child labor
  • Principle 6: Businesses should support the elimination of discrimination in respect of employment and occupation.
  • Principle 7: Businesses should support a precautionary approach to environmental challenges
  • Principle 8: Businesses should undertake initiatives to promote greater environmental responsibility
  • Principle 9: Businesses should encourage the development and diffusion of environmentally friendly technologies.
  • Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.

"While the UN Global Compact has evolved in countless ways over the past decade, there has been one unshakable and nonnegotiable constant—the central aim of translating the core ten principles into value-enhancing management practices," said George Kell, executive director of the UN Global Compact, in a letter announcing the launch of the management model in late June 2010. "We have always recognized that the ten principles and the four issues they represent—human rights, labor, the environment, and anticorruption—will find expression in different ways as companies and industries can vary significantly. In this sense, there really is no 'one-size-fits-all approach.'"

The UN Global Compact's 10 principles are in the areas of human rights, labor, the environment and anticorruption are derived from four major policy documents: The Universal Declaration of Human Rights, The International Labor Organization's Declaration on Fundamental Principles and Rights at Work, The Rio Declaration on Environment and Development and the United Nations Convention Against Corruption.

Deloitte, a signatory to the UN Global Compact since its inception in 2000, said the model integrates leading practices from companies who have been making progress in the 10 principles during the past 10 years. Designed to be "practical, scalable, and straightforward," the model consists of six management steps (i.e., commit, assess, define, implement, measure, and communicate), which companies use as part of good management practices. The six steps are designed to promote continuous monitoring and improvement in sustainability performance and across the 10 principles of the UN Global Compact. The steps are detailed below.

Under the first step, commit, company leadership publicly signals its commitment to the UN Global Compact by making the 10 principles part of company strategy, culture, and day–to–day operations with oversight. Under the assess step, a company evaluates the risks and opportunities as well as the impact on operations in order to refine its goals, strategies, and policies. Based on this risk assessment, under the next step, define, a company develops and refines goals and metrics specific to its operating context and creates a roadmap to carry out the program.

The next three steps—implement, measure, and communicate—involve putting the action plan into place, providing ways to measure specific programs, and developing a continuous improvement loop to identify and continue progress. Under the implement step, a company establishes and ensures ongoing adjustments to core processes, engages and educates employees, builds capacity and resources, and works with supply-chain partners to address and implement strategy. Under the measure step, a company adjusts its performance-management systems to capture, analyze, and monitor performance metrics and to make adjustments to evaluate and improve performance. Under the communicate step, a company communicates its progress and strategies and develops ways to achieve continuous improvement.

The management model details the process for each step that companies can do to proceed with that step as well as provides links to UN Global Compact resources that may help. The management model also details for each step the leadership practices needed to be carried out under that particular step. In that way, the model provides a guidepost for companies in either establishing or further refining their models for sustainability and corporate social responsibility in alignment with the principles of the UN Global Compact.

Several major pharmaceutical companies are participants in the UN Global Compact, according to an UN database. These companies include: Pfizer (New York), Merck & Co. (Whitehouse Station, NJ), GlaxoSmithKline (London), sanofi-aventis (Paris), Novartis (Basel, Switzerland), AstraZeneca (London), and Eli Lilly (Indianapolis, IN).