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UN Global Compact to Shake Out More Free Riders from Membership Ranks

More than 750 businesses, including major European and American corporations, are expected to be ejected from the United Nations Global Compact in the next six months, and a few hundred more after that, as the group evaluates whether its members are upholding its principles, the Guardian said.

Global Compact says is the largest voluntary corporate responsibility initiative in the world, and, in principle, its members are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labor, environment and anti-corruption.

However, executive director Georg Kell told The Guardian that the collective must deal with the free riders who have joined for PR purposes, but are not truly engaged with the core principles of the initiative. Global Compact’s expectations about engagement have developed to the point that companies clearly stand out if they are not meeting the standards.

In a letter released ahead of the Rio+20 Corporate Sustainability Forum this June, which UN Global Compact will host, Kell said that most companies and governments simply aren’t doing enough to achieve the global acceptance of sustainability as a value proposition.

Kell writes that a new contract between business and society is needed covering five areas: the need for corporate governance at the board level that evaluates environmental and social issues alongside business strategy; a reward system for goods and services that respond to sustainable solutions; a global policy framework to disclose sustainability information; responsible lobbying and advocacy for regulatory frameworks that look past the needs of the “dinosaurs of business”; and public-private partnerships for developing policy.

According to the Guardian, Kell believes that the corporate sector is moving too slowly to deal with the enormous social and environmental challenges ahead. All the same, Kell said he faced an internal struggle at the Global Compact to delist the thousands of companies from its membership.

Global Compact has more than 5,300 participating businesses from over 135 countries and is signing up new businesses at the rate of around 100 companies every month, the Guardian said.

In February, Global Compact revealed that 3,123 companies had been kicked out of Global Compact since 2005, for failing to communicate progress on their efforts to implement the compact’s sustainability efforts. One month later, the number of delisted companies has reached 3,287, including companies from Spain, Austria, the U.S., Slovenia, Germany, Brazil, France, Russia and many others.

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