UN Global Compact

The United Nations Global Compact is the world's largest corporate sustainability initiative, with over 20,000 participating companies and 3,800 non-business signatories across 160 countries, committed to aligning their strategies and operations with ten universal principles on human rights, labour, environment, and anti-corruption.

Launched in 2000 by UN Secretary-General Kofi Annan, the Global Compact asks companies to embrace, support, and enact a set of core values derived from the Universal Declaration of Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development, and the UN Convention Against Corruption.

The Ten Principles

Human Rights: Principle 1 requires businesses to support and respect the protection of internationally proclaimed human rights. Principle 2 requires businesses to make sure they are not complicit in human rights abuses.

Labour: Principle 3 requires businesses to uphold freedom of association and the effective recognition of the right to collective bargaining. Principle 4 calls for the elimination of all forms of forced and compulsory labour. Principle 5 calls for the effective abolition of child labour. Principle 6 calls for the elimination of discrimination in respect of employment and occupation.

Environment: Principle 7 requires businesses to support a precautionary approach to environmental challenges. Principle 8 encourages undertaking initiatives to promote greater environmental responsibility. Principle 9 encourages the development and diffusion of environmentally friendly technologies.

Anti-Corruption: Principle 10 requires businesses to work against corruption in all its forms, including extortion and bribery.

Communication on Progress

Participating companies are required to submit an annual Communication on Progress (CoP) describing their efforts to implement the ten principles and contribute to the SDGs. The CoP framework was updated in 2023 to include standardised questionnaire-based reporting with quantitative indicators, making disclosures more comparable across participants. Companies that fail to submit a CoP within the required timeframe are delisted from the initiative.

Relationship to ESG Frameworks

The Global Compact's ten principles serve as a foundational reference for many ESG frameworks. Numerous ESG ratings agencies use Global Compact compliance as a screening criterion. The principles align closely with GRI Standards, and the Global Compact has partnered with GRI to develop integrated reporting guidance. Many sustainable investment funds use Global Compact membership as a positive screen or Global Compact violations as an exclusionary criterion.

Further Reading

• UN Global Compact — Official website
• Ten Principles — Full text of principles

Related Topics

• ILO Conventions
• UN Guiding Principles
• ESG Ratings Overview