UN Global Compact: Platform for corporate sustainability

By Yoo Yeon-chul

"The metaverse reflects reality. If our own reality is not sustainable, it would become difficult to sustain the possibilities of the virtual world. The topic of sustainability is urgent and we believe the next generation must support Sustainable Development Goals (SDGs) in order to protect the world that we live in."

This message was delivered by the rising K-pop band Aespa during the 2022 High-Level Political Forum on Sustainable Development held at the U.N. headquarters in New York on July 5. Giselle, a member of Aespa, introduced the K-pop act as a "metaverse girl group" for its use of four avatar members existing in the virtual world and called for collective action to achieve the SDGs.

On the very same day, SM Entertainment, Aespa's management company and one of South Korea's largest entertainment companies, joined the United Nations Global Compact (UNGC). The company committed to align its business strategies and operations with the UNGC's mission for corporate sustainability and recognized the role of the private sector in the implementation of the SDGs.

The UNGC, the world's largest voluntary corporate citizenship initiative, was called into existence in 2000 by Kofi Annan, then secretary-general of the United Nations. Its mission is to create a sustainable and inclusive global economy that delivers lasting benefits to people, communities and markets. To make this happen, the UNGC supports companies to:
1. Do business responsibly by aligning their strategies and operations with the Ten Principles of the UNGC in the four areas of human rights, labor, environment and anti-corruption;
2. Take strategic actions to advance broader societal goals such as the SDGs.

The Ten Principles of the UNGC show that businesses should support 1) the protection of internationally proclaimed human rights; 2) the freedom of association and the effective recognition of the right to collective bargaining; 3) a precautionary approach to environmental challenges; and 4) anti-corruption in all its forms, including extortion and bribery, to name just a few.

Indeed, businesses were being recognized as important actors in achieving the goals of the U.N. Roughly 19,000 participants from around 161 countries are committed to the UNGC.

The UNGC Network Korea was founded in 2007 to promote participation and partnership of both the private and the public sectors to improve business sustainability. In particular, the UNGC Network Korea has put in the best efforts by not only conducting research but also organizing campaigns and working groups, and arranging active public forums with the companies.

The UNGC was in fact the first to bring forward the concept of environmental, social and corporate governance (ESG) in 2004 in its report "Who Cares Wins ― Connecting Financials to a Changing World." This report was aimed at developing guidelines and recommendations on how to better integrate ESG issues in asset management, securities brokerage services and associated research functions.

The UNGC has naturally served as a platform to promote ESG factors for companies worldwide. ESG is no longer an option but a necessity, as it acts as a non-financial performance indicator of corporate value around the world.

In response to the demands for ESG, the UNGC Network Korea has been actively supporting domestic companies to internalize and develop ESG strategies. For instance, working groups for ESG, human rights and anti-corruption have been organized for member companies to discuss domestic and foreign trends in corporate sustainability. Accordingly, it serves as a platform for knowledge-sharing and peer learning among companies and institutions.

Moreover, the UNGC Network Korea has localized the tracks of global programs that allow companies to integrate the Ten Principles and deliver concrete outcomes by facilitating performance analysis, capacity-building, peer-to-peer learning and multi-stakeholder dialogues.

Through these efforts, global challenges ― ranging from climate, water and food crises to poverty, conflict and inequality ― can be tackled with solutions that the private sector can deliver with business innovation. In the current rush to transform business models and systems for the future, integrity and values such as human rights, anti-corruption and sustainability will have a huge role to play.

In this context, no matter how large or small, and regardless of the industry, all companies can and must contribute to the SDGs. While the scale and scope of the global goals are expanding in an unprecedented way, the fundamental ways that business can contribute remain unchanged.

Companies should first conduct business responsibly and then pursue opportunities to solve societal challenges. This can be achieved through business innovation and collective action for a global economy that delivers lasting benefits to the workplace, marketplace and community. It is strongly recommended that as many companies as possible join the UNGC for their sustainability.

Yoo Yeon-chul (ycyoo87@gmail.com), former ambassador for climate change at the Ministry of Foreign Affairs, is serving as executive director of the U.N. Global Compact Network Korea. He also served as Korea's ambassador to Kuwait.