16 Feb, 2012

UN Chief Urges More Companies To Embrace Business Sustainability Ideals

Feb 14 2012 (UN News Centre) – UN Secretary-General Ban Ki-moon today encouraged more businesses to embrace the principle of sustainability in their strategies, noting that with the most of the world’s ecosystems in decline, widening social inequality and climate change, global prosperity, productivity and stability was at stake.

“We need corporate sustainability to be in the DNA of business culture and operations,” said Mr. Ban in his address to a gathering in New York entitled “KPMG Summit: Business Perspective for Sustainable Growth.” He pointed out that corporate sustainability is currently not properly valued, noting that many proven innovations and solutions – from energy efficiency to emissions reductions – are not supported with the right incentives.

“In fact, incentive structures still tend to encourage unsustainable behaviour. As a result, too many companies limit their sustainability efforts to pilot programmes that never take off. Even worse, sustainability becomes more a matter of public relations than how companies operate,” he added, lauding  the nearly 7,000 corporations in 140 countries that had joined the United Nations Global Compact initiative that seeks to foster responsible business practices.

Stressing the UN’s commitment to supporting companies to carry out their businesses in a sustainable way, Mr. Ban cited the UN-backed Principles for Responsible Investment that been embraced by more than 900 institutional investors representing at least $30 trillion in assets.

Through the UN-backed “Principles for Responsible Management Education,” over 400 business schools and related institutions are integrating sustainability into curriculum and research, he said, adding that the recently issued report of his Global Sustainability Panel also provided a blueprint for mainstreaming sustainability.

Mr. Ban also highlighted the UN’s Sustainable Energy for All Initiative that is mobilizing the private sector towards a more accessible, efficient and clean energy economy, and the fact that more than 400 business leaders had pledged their support for the Caring for Climate initiative designed to advance low-carbon solutions and help make the green economy a reality, he said.

He urged business leaders gathered at the conference to five steps to advance sustainability:

(+) Join the Corporate Sustainability Forum to be held on the sidelines of the UN Conference on Sustainable development in Brazil in June;

(+) Heed the call of a new generation of investors by publicly reporting on sustainability performance;

(+) Engage in responsible lobbying and advocacy to affirm their belief in free and fair trade;

(+) Work with governments to adopt smart regulatory frameworks and incentives that reward environmental and social performance;

(+) Work with the UN in its platforms and initiatives on sustainable business practices.

Full Text of Mr Ban’s Remarks to “KPMG Summit: Business Perspective For Sustainable Growth”

The private sector is a key partner for the United Nations. One lesson which I have learned in my five years as Secretary-General has been how important it is for the United nations to maintain and get support from business leaders around the world in meeting all the goals and realizing the Millennium Development Goals and health, climate change, and all the challenges we are facing now.

We are long past the era in which business and the United Nations eyed each other with suspicion. Today, we are together – challenging each other when necessary, but above all looking for ways to serve the common good.

As businessmen and businesswomen who have embraced sustainability, you in this audience are leaders in thought, and leaders in action. And I need your action at this time.

I am not here to preach to the converted.

I am here to ask you to do more, you have been giving great support to the international community. You are the ones who have a great capacity to deliver. That is why I am here.

We are at a critical juncture – economically, socially and environmentally.

More than one billion people lack access to food, electricity or safe drinking water.

Most of the world’s ecosystems are in decline.

Gaps between rich and poor are widening.

We are nearing the point of no return on climate change.

The threat to prosperity, productivity and stability is clear.

The past year was a breaking point of sorts.

Citizens by the millions voiced their discontent around similar themes: sustainability, inequality, corruption, repression and the absence of decent work.

Trust in Government and the private sector is declining dramatically.

A series of disasters, scandals and business-as-usual have made people increasingly skeptical of the corporate world.

The future of markets is under debate. But one thing is clear: we need markets that can deliver a sustainable and equitable future for all.

Many argue whether capitalism is in crisis. Others call this a crisis of globalization.

What I see is a crisis of leadership — a lack of imagination in looking at old problems with fresh eyes — and a lack of urgency as the clock keeps ticking down.

In these uncertain and tumultuous times, we need to work together to deliver solutions for sustainability.

The business case for sustainability is strong and getting stronger.

Market disturbances, social unrest, ecological devastation, natural and man-made disasters – whether near or far away – are having direct impacts on supply chains, capital flows, public opinion and employee productivity.

But risk paints only half the picture.

The positive case is far more compelling.

Building markets for the future.

Meeting growing consumer desire and demand for greener products and services.

Laying the foundations for dignity, stability and opportunity for all.

This is what sustainability is all about, and it is why more and more companies and investors have put corporate sustainability on their agendas.

The United Nations is helping them to focus on delivering value in four key areas: financial, social, environmental and ethical – what we call the quadruple bottom-line.

Our Global Compact initiative counts nearly 7,000 corporate signatories in 140 countries.

The UN-backed Principles for Responsible Investment have been embraced by more than 900 institutional investors representing more than $30 trillion in assets.

Through the UN-backed Principles for Responsible Management Education, over 400 business schools and related institutions are integrating sustainability into curriculum and research.

The just-issued report of my High Level Global Sustainability Panel has given us a blueprint for mainstreaming sustainability.

The Sustainable Energy for All Initiative which I have launched recently is mobilizing the private sector towards a more accessible, efficient, clean energy economy. We have concrete goals and an action plan in place.

These concrete goals are three: first, by 2030 we will have to provide energy access to all 7 billion people. By 2030 we should double the energy efficiency and double the rate of renewable energy in the global energy mix. These are ambitious targets but with your help I believe they can be done.

Through the Caring for Climate initiative, over 400 business leaders have pledged to advance low-carbon solutions and help make the green economy a reality.

The CEO Water Mandate provides a framework for water sustainability policies.

The Women’s Empowerment Principles are helping the private sector advance gender equality.

And through our Every Woman Every Child initiative, business is joining us to keep 16 million women and children from dying of preventable diseases.

From malaria to polio… businesses are helping us to do the small things that make a big difference in the lives of millions.

When I started my second term in January I reported to the General Assembly of the United Nations and announced my five action agendas. One is to wipe off major killers, including polio – polio is almost on the verge of being eradicated as is smallpox. Malaria — our target is to see almost zero deaths by 2015, even if we cannot eradicate malaria itself. Measles and pediatric HIV infections. Those major killers are the ones we want to wipe of this earth.

Doing well by doing good has become an accepted business principle.

We are a far cry from 20 years ago, when the United Nations hosted the first Earth Summit in Rio.

At that time, only a few companies were exploring the notion of sustainable business. Today thousands are doing so.

And yet… corporate sustainability as currently practiced has yet to rise fully to the challenge.

The principles of sustainability have not penetrated business strategy. Nor have we seen the depth of action that is needed.

And those that are engaged represent only a small percentage of the world’s estimated 80,000 multinationals and millions of smaller enterprises.

We need corporate sustainability to be in the DNA of business culture and operations. Going to scale is the priority.

But there are several factors holding us back.

Corporate sustainability is not properly valued.

Countless proven innovations and solutions — from energy efficiency to emissions reductions — are not supported with the right incentives.

In fact, incentive structures still tend to encourage unsustainable behaviour.

As a result, too many companies limit their sustainability efforts to pilot programmes that never take off.

Even worse, sustainability becomes more a matter of public relations than how companies operate.

Governments and politicians are focused on pleasing constituents within election cycles.

I have been urging leaders of the world not to be prisoners of their constituencies. When they have a vision and commitment they have to carry them out. But business CEOs can do it. There are many restrictions on leaders. I myself am constrained by the General Assembly, the Security Council, and other intergovernmental bodies. There are more things I can’t do than can. But you business CEOs, when you decide something today, it can be carried out tomorrow. That is why I am asking you to help the U.N. to help us protect planet earth and help lift millions of people from poverty and disease.

Or we see the other extreme – operating in undemocratic regimes where the will of the people does not figure into the equation.

Markets, meanwhile, remain obsessed with short-term returns.

And at a personal level, billions of people are just trying to survive and provide for their families on a day-to-day basis – gathering wood for heating and cooking, or working several jobs just to put food on the table.

The Rio+20 Conference in June is a chance to change course. And I hope you will participate in that conference and make your voices heard.

At Rio+20, business and investors have a true opportunity to show leadership.

Here are five steps we need you to take.

First, join us at the Corporate Sustainability Forum in Rio. Organized by the UN Global Compact, it will showcase innovative public-private partnerships and business contributions. Use Rio to show the world what your companies are doing and the range of partners you have engaged.

Second, heed the call of a new generation of investors by publicly reporting on sustainability performance. Let us work together to forge a global policy framework for disclosing such information – and for explaining why companies do not.

Third, engage in responsible lobbying and advocacy. Do not, in one breath, affirm a belief in free and fair trade and then, with the next, support perverse subsidies and protectionist legislation. Do not proclaim a broad commitment to sustainability while simultaneously blocking meaningful steps on climate change.

Fourth, work with governments to adopt smart regulatory frameworks and incentives that reward environmental and social performance.

Fifth, work with the United Nations in the platforms and initiatives I have outlined for you today. That includes the Global Compact. We need more companies in the United States to make this choice.

We have an ambitious agenda in Rio.

You all understand the high stakes — for jobs, for social justice, for the Millennium Development Goals, for the health of the planet.

You all know that solutions lie in a different way of thinking.

You are already taking steps and I count on you to do even more.

The world needs you to spread this message to your peers, partners and customers – to all those who have yet to act, and to all those who are sitting on the fence or even actively opposing change.

It is time to balance the global economy and build a stronger social compact… time for transformation.

I look forward to your leadership as your companies embrace the sustainability challenge in Rio and beyond.

Sustainable development is the top priority of the United Nations and for my second term as Secretary-General.

Corporate sustainability has gone mainstream. Now we must achieve critical mass.

Only with your strong support and leadership we can change and shape the world we want and we can make this world better for all.