State of the Union Between Business and Society at a Crossroads, Says UN Global Compact’s Georg Kell
Addressing the “state of the union” between business and society, UN Global Compact Executive Director Georg Kell urged key players – business, Governments and investors – to move swiftly in order to achieve a critical mass of companies acting responsibly. He delivered these keynote remarks at the Oslo Business for Peace Summit and Award 2014 at Oslo City Hall.
Describing this crossroads, Kell stated that while “a global movement is underway, changing markets from within … [and] long-term financial success goes hand-in-hand with social and environmental responsibility and sound ethics,” he argued that “until sustainable business practices are rewarded by markets and supported by Governments, companies devoid of responsibility will keep winning contracts, cutting corners and seeking profits at any cost.”
Mr. Kell went on to lay out key developments that point to the transformative potential of the corporate sustainability movement, including the increasing materiality of environmental, social and governance challenges; the move by some companies from resource takers to market builders in developing countries; and the global spread of the Global Compact, with companies in over 140 countries taking action.
In answering the question of why more companies are not making a shift towards sustainability, Kell stated that “the enabling environments and economic incentive structures are lacking” and pointed to three fundamental factors: Governance failures, the erosion of multilateral cooperation and trade, and the short-termism that defines markets and politics.
To push forward, Kell outlined actions needed by a range of actors if unprecedented changes in markets are to be achieved. He called on companies everywhere to integrate corporate sustainability into the DNA of their culture and operations.
Kell stressed the need for business leaders to align their public policy engagement with sustainability principles. He urged all trade associations to embrace the future and “[move] from a defensive stance to one defined by proactive, pragmatic leadership”, and stated that business could provide powerful momentum in areas such as climate change and public procurement.
He additionally outlined actions for Governments, financial markets and citizens and consumers.
“I am confident that the private sector is prepared to deliver on the compact between business and society. We can move from incremental to transformative impact,” said Kell.
Governing Mayor of Oslo Stian Berger Røsland and Chairman of the Business for Peace Foundation Per L. Saxegaard opened the Summit and Award Ceremony, which is organized by the Foundation to recognize individual corporate leaders who foster peace and stability by creating shared value between business and society. Among the 2014 honourees recognized was Marilyn Carlson Nelson, Co-CEO of Carlson Holdings, Inc. and a UN Global Compact Board Member.
The UN Global Compact’s Business for Peace initiative assists the global nomination process for the Oslo Business for Peace Award through Global Compact Local Networks that propose outstanding corporate leaders who have achieved success ethically and responsibly.
Source: UN Global Compact