Secretary-General Calls on Business Leaders to Embrace, Adopt New Strategies

 

for Markets That ‘Bring Profits and Social Advancement’, in Summit Address

 

Following is UN Secretary-General Ban Ki-moon’s address to the Global Compact Leaders Summit, in New York, 24 June:

Welcome to the third Global Compact Leaders Summit.

A special welcome to you, Mayor [Michael] Bloomberg — a great leader of a great host city, New York, a good friend of mine and a good friend of the United Nations.  Thank you very much for your participation and your leadership.  Like so many others here today, you are a true business visionary.  Thank you for joining our effort to take the Global Compact to the next level.

Before I became Secretary-General of the United Nations, I saw the power of business up close.

As Minister for Foreign Affairs and Trade of the Republic of Korea, I saw how smart investment can bring both profits and social advancement in all parts of the world.

As a boy growing up in a war-torn country, Korea, I saw what business can do to help rebuild a country and transform an entire region.

Now as Secretary-General of the United Nations, I am delighted to have this opportunity to push the Global Compact forward to the next higher stage and equip it for its second decade.

I am eager to work with business, with each of you, to generate the benefits we know are possible — the benefits I have seen first hand.

In its first 10 years, the Global Compact has become the world’s largest and most ambitious initiative of its kind.  Corporate sustainability is becoming a byword in companies across the world.

At first, the Compact was driven solely by morality.  We asked businesses to do the right thing.

Morality is still a driving force.  But today, the business community is coming to understand that principles and profits are two sides of the same coin.

This realization could not be happening at a better time.

Ours is an era of tectonic shifts in the global order.  Wealth and economic power are shifting to emerging economies.

Major economies continue to cope with the greatest economic and financial crises in most of our lifetimes.

Business itself, in the aftermath of scandals and mismanagement, faces the need to build and renew trust.

The Global Compact can be just the vehicle we need to carry us forward — to sustainable growth, to markets that bring profits and social advancement at the same time.

I see four priorities ahead of us.

First is leadership.

Leadership of everyone present this morning.

It is incumbent on you, the participants and stakeholders in the Global Compact, to lead.

You are at the forefront of globalization.  You can and must play a central role in sustaining the openness on which development and prosperity depend.

That means emphasizing sustainability across your operations and in your investment strategies.

It means inspiring others into a race to the top.

And it means thinking differently about how and where we invest, thinking differently about creating markets of the future and creating opportunities for growth.

At the G-20 Summit meeting this weekend, you are likely to hear leaders of the world stress the need for austerity and budget consolidation at a time of crisis.

I will argue exactly the opposite: that we can’t afford not to invest in the developing world.  We all know that’s where the greatest need is; but that is also where some of the greatest dynamism is.

Global economic growth requires investment in the developing world.  With official development assistance (ODA) under pressure, foreign direct investment is that much more important.

Second, we must heed the lessons of the financial crisis.

Businesses must move away from their devotion to short-term profits, which distorts both accounting and daily operations.  The private sector must go further in embracing long-term value creation.

An ethical culture must be embedded into business practices.  Distinctions between right and wrong cannot be ignored.

Third, we need business to support the Millennium Development Goals.

This is a blueprint that world leaders adopted for the harmonious prosperity and the development of the world at a time of the 2000 Millennium — the new millennium.

In our efforts to eradicate poverty, create jobs and control disease, 10 years of experience has shown us what works — and what doesn’t work.

Our challenge now is to again scale up our commitment.

We have made that job easy for you at this Summit.  Through a rigorous process of vetting and analysis, we have identified 15 partnership opportunities — 15 ways to move us towards the Millennium Development Goals.

They cover a wide range: hunger, disease, green energy, protecting girls from violence.  They include our Joint Action Plan for Women’s and Children’s Health.

But here is what they share: each is ready to be scaled up now; and each has a powerful multiplier effect.

Let us remember: investments in the developing world are investments in growth everywhere.

That brings me naturally to the fourth priority: embrace and adopt new strategies and tools for this new era.

The Blueprint of Corporate Sustainability Leadership being launched at this Summit draws on a decade of experience and will be the cornerstone of our efforts as we move ahead.  It contains 50 ways for companies to distinguish themselves.

My Special Representative on the issue of human rights and transnational corporations and other business enterprises, Professor John Ruggie, continues his efforts.

We also have developed new frameworks for anti-corruption and environmental stewardship; new principles to guide business on women’s empowerment, social investment and children’s rights; a sustainability guide for supply chains; and guidelines for responsible practices in conflict areas.

These new resources, combined with the enduring power of the Compact’s 10 principles, can help you attain higher levels of performance across the sustainability agenda.

While I am asking you to take the lead, you will not be alone.

To Governments of the world, I say: Renew your commitment to transparency and smart regulation.  I also urge you to build up your capacities to work with the private sector.

To investors, I say: embrace the principles for responsible investment; and integrate environmental, social and corporate governance issues into financial decision-making.

To the academic community: incorporate business ethics more fully into your core programmes, in keeping with the principles for responsible management education.  To civil society leaders: continue your vital “watchdog” function while also seeking more partnerships with the private sector.

As for the United Nations itself, let me assure you that the United Nations is evolving to fulfil its side of the Compact bargain.  Our mindset has changed as well.

Ten years ago, only a small group of business leaders assembled here to launch this Global Compact initiative.  Today, we have more than 8,000 participants.  Today, we can set a new goal: 20,000 participants by 2020.

Our hope is to create a truly transformative movement.

Our aim is reach a tipping point towards a new era of sustainability.

And our commitment is to do all this while maintaining the integrity of the initiative.  Already, in the past two years, we have de-listed more than 1,300 companies for failing to communicate progress in implementing the Compact principles.  The Compact may be a voluntary initiative, but that doesn’t mean we lack teeth in policing it.

Let us carry forward the great momentum that you yourselves have been so instrumental in shaping — the momentum has already been generated.  Let us all be architects of a brighter, more sustainable future.  I look forward to continuing our work together on the path to that right and necessary destination.

You can count on the United Nations, you can count on me and, likewise, I count on your leadership and commitment for a better future for all.

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For information media • not an official record