Sustainable Development: The UN Millennium Development Goals, the UN Global Compact, and the Common Good

18. Millennium Development Goals, Business Planning, and the UN Global Compact Management Model

332 18 | Millennium Development Goals, Business Planning, and the UN Global Compact Management Model Gerald F. Cavanagh, S.J., and Eric Hespenheide Preserving a livable planet and reducing global poverty are essential not only for sustaining vigorous markets but also for the future stability of the world. Moreover, it is essential for a business firm to plan for future products and markets. Thus the united nations has invited business firms to become partners in providing jobs and products for the world’s poor, reducing harmful pollutants, and combating poverty. Such activities may seem more properly to be the role of governments, since they are pledged to work for the benefit of citizens. however, governments generally seek the benefit of only their own citizens. It comes as a surprise to many people that countless business firms now demonstrate more responsibility for the future of people and the planet than do governments. The united nations Global compact (unGc) provides a consistent, straightforward, and universally accepted framework for business to cooperate with citizens around the world to improve human rights, worker rights, and the natural environment and to battle corruption. The unGc Management Model Millennium Development Goals, Business Planning 333 is designed as an instrument to help business firms establish and then work toward accomplishing their own goals, and also, following the unGc, contribute to achieving the united nations Millennium Development Goals (MDGs). In this chapter we will address the following topics: the background of the un Global compact; the development of the unGc Management Model; the model itself; and preliminary experience with the model by firms that are beginning to incorporate it as an aid to their planning. First, let us broaden our scope to consider the tools that are available to help business firms develop just, consistent, and sustainable business practices worldwide. TReATIeS, coDeS, AnD SeLF-ReSTRAInT As has been widely reported in the media, some businesses engage in activities that result in sweatshops and environmental degradation. While free markets provide quality and product usefulness, the market system also gives incentives to keep costs low, so markets thus often reward poor wages and working conditions and the dumping of toxic wastes in the air or water. More than two decades ago there were several attempts to develop a code of ethics for global corporations. one of these was the Principles for Global corporate Responsibility produced by the Interfaith center on corporate Responsibility, and another was drawn up by the united nations itself.1 These codes were unsuccessful, largely because they lacked the support of the business community. Multilateral agreements on wages and working conditions have been in place for even longer. But such agreements are not enforced and thus have limited ability to affect these issues. The kyoto Protocol to reduce greenhouse gas emissions, with its minimal goals, has not been ratified by the united States and a few other major emitters . The united States, which is still the world’s biggest market, has been a major obstacle to enacting global treaties on similar issues. It has also refused to ratify treaties such as the Law of the Sea Treaty and the World health organization Infant Formula Agreement. So there seems to be little chance that effective and enforceable international treaties will be enacted on these essential issues.2 334 Gerald F. Cavanagh, S.J., and Eric Hespenheide Global corporations provide jobs for poor people, and many firms have voluntarily taken steps to improve wages and working conditions and to preserve the environment. however, such actions can increase their costs and thereby give a short-term, competitive advantage to a lower-cost firm that is less responsible. This unfairly tilts the “level playing field” that efficient markets require; the long-term operation of an effective market requires that level playing field. executives of global firms are aware of this dilemma and propose some solutions in the form of global codes of business behavior. The caux Round Table (cRT) is a group of top executives from global firms. Founded in 1986, they developed their Principles for Business in 1994. These principles provide a set of seven “general principles” and then specific sets of “stakeholder principles” covering customers, employees, owners/investors, suppliers, competitors, and communities in which they operate.3 The caux Principles are proposed as a benchmark to which executives can compare their own firm’s code. Another early initiative is the ceReS Principles, which seek to reduce environmental degradation...