The UNGC standard explained

What is the UNGC?

The United Nations Global Compact, is a non-binding pact designed to get commercial enterprises to make their sustainability policies transparent and the steps taken to implement them through reporting. 

At the core of the UNGC Standard is the desire to make the world a better place from both a social and an environmental perspective. But what elements form this pact and how can they be achieved?

What are the10 principles of the UNGC standard?

The 10 Principles are a set of core guidelines that underpin the UNGC Standard. They focus on a number of ethical, big-picture world issues. 

The four areas of the UNGC standard

The 10 Principles are categorised into four key areas: human rights, labour standards, environmental responsibility, and anti-corruption measures.

1. Human rights principles in the UNGC standard

Women’s empowerment principles

Adhering to basic human rights is one of the lynchpins of a successful business, and the UNGC Standard recognises this as its human rights principle. One such factor is the Women’s Empowerment Principles, which encourage the empowerment of women in the workplace and ensure employment opportunities are the same regardless of gender.

Children’s rights and business principles

Another key focus is Children’s Rights and Business Principles, which address the potential negative effects a business’s activities may have on children.

How human rights impact business success

Both principles uphold the notion that a solid human rights strategy can improve a business’s overall success.

2. Labour standards in the UNGC standard

Eliminating forced and child labour

The second set of principles applies to working conditions within a business and best practices to ensure organisations are responsible and fair in relation to employees. One key principle forbids all forms of forced and compulsory labour, with a particular focus on child labour.

Promoting fair and inclusive workplaces

Another principle seeks to eliminate workplace discrimination completely.

3. Environmental responsibility in the UNGC standard

Encouraging environmental sustainability in business

The third element of the 10 Principles is crucial to combatting climate change - the environment. UNGC Standard encourages members to promote greater environmental responsibility.

The role of innovation in sustainable technologies

Advanced actions are offered in the form of framework platforms for business leaders, such as the Caring for Climate platform. The importance of fostering innovation in new sustainable technologies is also stressed.

UNGC’s caring for climate platform

This is particularly important, as although it represents one of the most costly elements of implementing the UNGC Standard, the success of carbon reduction targets includes the rollout of new renewable technologies.

4. Anti-corruption measures in the UNGC standard

Addressing bribery, corruption, and extortion

The fourth element of the UNGC Standard concerns bribery, corruption, and extortion.

The private sector’s role in anti-corruption efforts

This principle places responsibility on the private sector to mitigate the role that corruption will have on environmental, social, and economic progression in the future.

Why is the UNGC standard important for businesses?

Enhancing Corporate Social Responsibility (CSR) through UNGC

The UNGC Standard provides transparency regarding a business’s alignment with other ethical frameworks. The UNGC Standard is a tool for businesses to show their commitment to Corporate Social Responsibility (CSR). The framework allows businesses to evaluate their current CSR activity against their future goals, which might focus on improved Environmental, Social, and Governance (ESG) performance.

Aligning business strategies with global sustainability goals

The United Nations launched the 2030 Agenda for Sustainable Development in 2015. The directive, underpinned by 17 world Sustainable Development Goals, aims to make the world a better place through a series of measurable social and environmental changes. Many of the goals, which include promoting sustainable cities, improved clean water access, and reduced poverty, overlap with the Principles found in the UNGC Standard framework, meaning if your business is adhering to one directive, it could potentially contribute towards achieving the other.

Building stakeholder and consumer trust with UNGC compliance

The measurable progress and frameworks the UNGC Standard provides are recognisable across the sector, providing a yardstick for stakeholders and consumers to measure a potential business connection against on the broader market. Using these comparative frameworks, potential business partners can then make an informed decision about the progress a company is making regarding CSR or whether they want to enter business with them in the first instance, as they would view the UNGC Standard as a trustworthy measure.

How to join and implement the UNGC standard?

Steps to become a UNGC participant

Joining the UNGC Standard is entirely voluntary, with interested organisations able to join or leave the initiative whenever they choose. Our step-by-step guide takes you through the process of joining the pact:

1. Prepare a letter of commitment

Committing to the 10 Principles, supporting the Sustainable Development Goals, and submitting a yearly Communication on Progress.

2. Complete the online application process

Including company information, a primary contact point, an appointed executive-level employee, financial details, and a government registration document confirming your business is a legal entity.

3. Confirm membership and submit fees

Fill out a declaration of membership authorised by a person allocated to represent your company and provide a billing address to collect the annual membership fee.

Reporting and compliance requirements for the UNGC standard

The heart of UNGC participation is the Communication on Progress (COP), which must be completed annually. If you’re a non-business entity, you must fill out an annual Communication on Engagement (COE). The COP or COE details how an organisation has incorporated the UNGC Standard’s 10 Principles into their operations and wider strategy.

Communication on Progress (COP) and Communication on Engagement (COE) explained

The COP also requires two tasks, including an online questionnaire and an e-sign detailing the CEO’s Statement of Continued Support. In the case of a COE, the following completed documents are required: a statement by the Chief Executive or equivalent describing the actions the organisation has taken to support the 10 Principles and measurement of the outcomes of these activities.

Integrating UNGC principles into business strategy

The UNGC Standard aims to reframe commercial strategies to include positive progress from an environmental and social perspective.

Implementing environmental and social policies

While the way you incorporate the 10 Principles will depend entirely on business type and sector, activities you could monitor could include highlighting policies that promote environmental stewardship.

Monitoring and measuring ethical business practices

Another area to focus on is accountability procedures put into place for corruption-related activities.

Embracing the UNGC Standard helps businesses align with global ethical principles, fostering sustainability, transparency, and long-term success.