Overview
Introduced: 2000
Effective from: Ongoing
Last modified: N/A
Region(s): Global
About
The United Nations Global Compact (UNGC) is a voluntary initiative that encourages businesses worldwide to adopt sustainable and socially responsible policies. Companies that join the UNGC commit to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labor, environment, and anti-corruption.
The UNGC also supports the United Nations’ Sustainable Development Goals (SDGs), which aim to address global challenges such as poverty, inequality, and climate change by 2030.
Criteria for compliance
Entities covered
Any company, regardless of size, sector, or location, can join the UNGC. By doing so, companies commit to upholding the ten principles and contributing to the achievement of the SDGs.
Framework structure
The UNGC is structured around 10 Principles and 17 Sustainable Development Goals (SDGs):
- The 10 Principles focus on areas such as human rights, labor standards, environmental protection, and anti-corruption.
- The 17 SDGs set ambitious targets for global development, addressing challenges like poverty, inequality, health, education, and climate change.
Compliance timelines
Companies are expected to submit an annual Communication on Progress (CoP) report, detailing their efforts to implement the 10 Principles and contribute to the SDGs.
Disclosure requirements
Communication on Progress (CoP)
Companies must report annually on their progress in implementing the UNGC principles. The CoP should include a CEO statement, a description of practical actions taken, and performance indicators. The CoP is published on the UNGC website, ensuring transparency and accountability.
Third-party auditing
The UNGC does not require third-party auditing, but companies are encouraged to seek external assurance for their CoP reports to enhance credibility.
Penalties for non-compliance
Companies that fail to submit a CoP for two consecutive years may be listed as “Non-Communicating” and eventually delisted from the UNGC. While this does not carry legal penalties, it can impact the company’s reputation and stakeholder relationships.
