Distribution Network
Content
Prominent companies in the developed world are now falling foul of the United Nations Global Compact's tougher demands on signatories.
High-profile European businesses such as Severn Trent and Premier Oil have recently been declared 'non-communicating companies' by the Compact Office for failing to report on their progress on the Compact's ten principles. This is required within two years of signing up and then every year. The next step in the process, if the companies fail to report, is for the Compact to deem them 'inactive'.
Until now the list of non-communicating businesses has been dominated by small enterprises in the developing world and has featured few large western companies. However, last month's updated list of more than 400 non-communicators contains more prominent names than before. They include Abena (Denmark, household goods); Acegas (Italy, chemicals); Edelman (US, communications); Europcar (France, car hire); Hydro Quebec (Canada, utilities); Rotork (UK, machinery); Sanpaolo (Italy, insurance); and Wienerberger (Austria, construction).
Companies can regain full Compact signatory status by producing a communication on progress (COP) within a year of being declared non-communicators, but appearing on the list is a black mark against large companies that have ample resources to fulfil such a limited obligation, said a Compact Office spokesman. Most COPs are only a page or two long and large companies usually integrate them into their sustainability reports.
'Ending up on this list, although we consider it only a first warning shot, does not bode well for many companies because civil society and the media have increasingly been paying attention,' the spokesman added.
The Compact Office says some of the large western companies may have failed to communicate because their non-financial reporting responsibilities shift between individuals and departments 'and as a consequence, the management of the Global Compact commitment falls through the cracks until we remind the company'. Alternatively some may have not met the deadline for submitting a communication because this does not correspond with their reporting cycle. However, the Compact Office told EP: 'Especially in the case of multinationals, there really is no reason to become non-communicating for an extended period of time.'
Sanctions against companies that fail to issue COPs were introduced in 2005 after complaints about 'free riders' that signed up to the Compact but did little else. Signatories that miss the two-year deadline to produce a COP and are declared non-communicating are given another year to do so. If that does not happen they are deemed 'inactive' and are barred from participating in Global Compact events and from using its name or logo.
Last month more than 800 companies were listed as inactive. Few large western companies are among them, but the French media services company Aegis was added in November.
High-profile European businesses such as Severn Trent and Premier Oil have recently been declared 'non-communicating companies' by the Compact Office for failing to report on their progress on the Compact's ten principles. This is required within two years of signing up and then every year. The next step in the process, if the companies fail to report, is for the Compact to deem them 'inactive'.
Until now the list of non-communicating businesses has been dominated by small enterprises in the developing world and has featured few large western companies. However, last month's updated list of more than 400 non-communicators contains more prominent names than before. They include Abena (Denmark, household goods); Acegas (Italy, chemicals); Edelman (US, communications); Europcar (France, car hire); Hydro Quebec (Canada, utilities); Rotork (UK, machinery); Sanpaolo (Italy, insurance); and Wienerberger (Austria, construction).
Companies can regain full Compact signatory status by producing a communication on progress (COP) within a year of being declared non-communicators, but appearing on the list is a black mark against large companies that have ample resources to fulfil such a limited obligation, said a Compact Office spokesman. Most COPs are only a page or two long and large companies usually integrate them into their sustainability reports.
'Ending up on this list, although we consider it only a first warning shot, does not bode well for many companies because civil society and the media have increasingly been paying attention,' the spokesman added.
The Compact Office says some of the large western companies may have failed to communicate because their non-financial reporting responsibilities shift between individuals and departments 'and as a consequence, the management of the Global Compact commitment falls through the cracks until we remind the company'. Alternatively some may have not met the deadline for submitting a communication because this does not correspond with their reporting cycle. However, the Compact Office told EP: 'Especially in the case of multinationals, there really is no reason to become non-communicating for an extended period of time.'
Sanctions against companies that fail to issue COPs were introduced in 2005 after complaints about 'free riders' that signed up to the Compact but did little else. Signatories that miss the two-year deadline to produce a COP and are declared non-communicating are given another year to do so. If that does not happen they are deemed 'inactive' and are barred from participating in Global Compact events and from using its name or logo.
Last month more than 800 companies were listed as inactive. Few large western companies are among them, but the French media services company Aegis was added in November.
Super Featured
No
Featured
No