‘A Necessary Supplement’ – What the United Nations Global Compact Is and Is Not

Abstract

The United Nations Global Compact is with currently over 6,000 voluntary participants the world’s largest corporate citizenship initiative. Although having made much progress towards its goals, the Compact still faces a lot of criticism. This paper first analyzes three critical allegations often made against the Compact by looking at the academic and non-academic literature. (1) The Compact supports the capture of the UN by “big business”. (2) Its ten principles are vague and thus hard to implement. (3) The Compact is not accountable due to an absence of verification mechanisms. This article discusses these three allegations and argues that they rest on a misunderstanding of (a) the nature of the Compact, as well as its mandate and (b) the goals it tries to achieve. From this discussion of what the Compact is not, the article then outlines a perspective that classifies the initiative as a necessary supplement to incomplete state and non-state regulatory approaches in order to illustrate what the Compact is. The article argues that critics neglect this important supplementary role of the Compact. This neglect leads to an underestimation of the Compact’s true potential. Based on this discussion, the article looks at specific ways of improving the Compact and the challenges that must be understood when considering the rapid growth of the initiative.

Keywords: UN Global Compact, corporate social responsibility, civil regulation, stakeholder theory