WHY UNGC?

• Liberalization of markets – reduction of the regulatory approach

• Emergence of global giants, consolidation of market share

• Development of the ‘embedded firm’.

– Development of supplier networks in developing countries

Key drivers of UNGC

Around the world• NGO Activism

• Responsible investment

• Litigation

• Gov initiatives

Developing Countries• Foreign customers

• Domestic consumers

• FDI

• Government

Key Drivers: NGO Activism

• Facilitators: IT (esp Internet), media, etc.

• Boycotts, brand damage, influence legislation, domino effect

• e.g. Shell in Nigeria, Exxon in Cameroon, Coca Cola, Apparel Industry (Nike, Gap), GMO, Wood Products, etc.

MERITS Fill governance gap Socially Responsible

- human rights - environment- anti corruption

Business Relevance- mitigating legal risks- mitigating reputational risk- improved operating environment - employee satisfaction

UN Millennium Development Goals

DEMERITS No binding power

- voluntary action can never substitute regulation No effective monitoring power

- Ayoreo Indians in Paraguay Acts as the PRO of MNCs

- excuse and argument to oppose any binding national regulation on corporate accountability

- 2 of the 3 representatives of last UNGC where from MNCs

- entry door to increase corporate influence on the policies of the United Nations

CONCLUSION