Companies’ implementation of environmental policies and actions improved in 2010, with large corporations continuing to show better performance than small and medium-sized enterprises, according to the latest implementation survey by the UN Global Compact.
Despite progress by SMEs, company size has a significant impact on how likely firms are to set environmental policies, the survey found. But on environmental actions, the performance gap between large and small companies narrowed in the past year.
Publicly-traded companies show markedly higher implementation rates those that are privately held, in nearly all environmental areas, the UN said.
The annual survey was completed anonymously by more than 1,200 companies participating in the Global Compact, the UN corporate responsibility initiative, and forms the basis of the 2010 Global Compact Annual Review (pdf) launched at UN Headquarters today.
All 6,000+ companies participating in the Global Compact were invited to take the survey, which was conducted in multiple languages in November and December 2010.
Companies reported higher rates of environmental policy implementation in 2010 compared to 2009, and the increase was more marked than the slight upward trend from 2008 to 2009, the UN said. There were significant increases in triple-bottom-line, production, and sustainable consumption policies. The most common environmental policy was sustainable consumption, with a participation rate of 71 percent.
Companies in the survey also took key environmental actions at higher rates in 2010 than in 2009 – especially in the areas of management systems (+15 percent), life-cycle assessment (+6 percent) and reporting greenhouse gas emissions (+5 percent). (See chart, above, for participation rates in various environmental actions.)
But the survey found that only a minority of companies are taking steps around water footprinting – even among the largest companies. And only half of the largest companies are taking steps on life-cycle assessment and eco-design, the report said.
More than 70 percent of all respondents indicate the active involvement of their chief executives in policy and strategy development, which the Global Compact said reflects the growing relevance of sustainability issues to business performance. Nearly 60 percent of all publicly traded companies report active involvement of their boards of directors.
Regarding supply chain implementation of sustainability principles, 65 percent of companies report some measure of supplier involvement, with 12 percent requiring their suppliers to be Global Compact participants.
Likewise, 79 percent of companies spread their commitment to the Global Compact principles to their subsidiaries, with nearly half of those (44 percent) creating separate sustainability functions at the subsidiary level.
Launched in 2000, the United Nations Global Compact is a call to companies around the world to align their strategies and operations with ten universal principles in the areas of environment, human rights, labour and anti-corruption, and to take action in support of broader UN goals. The UN describes the compact as the world’s largest corporate responsibility initiative.
The Global Compact continued to grow in 2010 and now includes more than 6,000 business participants, as well as more than 3,000 non-business signatories, the UN said. More than half of all businesses in the initiative are small and medium-sized enterprises. The countries with the highest numbers of participants are France, Spain, the U.S. and Brazil