The UN Global Compact - Businesses Look Ahead

At dinner this week I had a chance to quiz Georg Kell about the UN's Global Compact. Georg is Executive Director of the UN Global Compact. What is his mission? He told me it's about how business and the UN can address global problems.

I learned to be a fan of the UN at my father's knee. He was a member of the U.S. Budget Bureau team at the founding of the UN in San Francisco in 1945 and he then moved over to work for two UN agencies during the next two decades.

Originally, business leaders were huge supporters of the UN. Think of the gift of six Manhattan blocks to the UN from John D. Rockefeller, Jr. Business looked forward to the UN's role not just in promoting peace but in supporting through its specialized agencies a global infrastructure, such as safe airports and air traffic controls. Georg views 1945 as one of the great moments of history. He says:

The UN had broad support. It was seen as an agency for development to ensure peace. Development requires private investment, so business was a natural ally. My job is to rebuild the sense of partnership between business and the UN in advancing the goals of peace and development.

But business support for the UN waned during the years when news about the UN seemed to revolve around ideology instead of practical problem-solving. Georg is practical person. A native of Munich, he started his career analyzing small companies for a venture-capital firm. He became a UN civil servant 18 years ago and for the first ten years of his career he worked with UNCTAD. On the 50th Anniversary of the UN he wrote a paper giving five reasons why the UN is good for business and deserved more support. This paper attracted the attention of UN Secretary-General Kofi Annan... and Georg was soon given his present mandate.

The Global Compact has been a success. Business is again deeply involved. Some 5,000 companies in 130 countries have signed up with the Global Compact. In 80 of the countries, business networks have been created with at least half a dozen business leaders and a professional staff. The focus of the networks recently has been on the following key topics:

- Challenges to the Global Business Model. What happens to world trade if businesses shorten their supply chains or, worse, if countries look inward to their domestic industries and move to defend them with protectionist tariffs or quotas or other barriers?

- Best Practice for Business in Conflict-Prone Areas. The idea of divestment of subsidiaries from countries that are prone to conflict is being critiqued as making the situation worse. What are best business practices in such areas?

- Response to Evidence of Climate Change. Scientific evidence about the threats from climate change is accumulating and is contributing to a new sense of urgency among businesses about the need for action. The UN will convene a conference in Copenhagen on May 24-25 that will bring together 500 CEOs or senior corporate staff along with other stakeholders. Georg sees the solution as a carbon tax or perhaps a form of carbon cap.

It helps that the global financial meltdown has made executives more humble about their ability to withstand financial and non-financial (environmental, human) risks. Georg believes that a major shift has occurred, back toward thinking with a longer-term time horizon. Sustainability is not being taken for granted as much as it was a few years ago. Business is more somber, more interested in functionality, quality, durability.

My Dad's labors for the UN were practical. In 17 years as Director of Technical Assistance at the International Civil Aviation Organization, he built up a crew of 1,500 ICAO technical experts working with airports all over the world to ensure safe air travel. Pilots of a German airline flying into Tokyo or Moscow learned to communicate smoothly in a common language with airport controllers to anticipate weather conditions, take off and land safely.

Georg Kell and the Global Compact are embarked on a new round of missions for the UN in partnership with world business. In a world that has seen a slew of economic and financial disappointments during the past year, it's good to be able to find people and organizations on which to pin some hope for economic recovery, conflict reduction and a sustainable environment.