Doing well by doing good with the performance of United Nations Global Compact Climate Change Champions

Are Climate Change Champions favorable to investors? This is the first study of portfolio performance of a fourth generation SRI screening strategy based on United Nations Global Compact firms who are Climate Change Champions. The operational changes made by UNGC firms are real and disproves the notion that UNGC firms are merely green-washing. We find that after firms join UNGC, there is a positive effect on long term portfolio performance. UNGC firms have lower volatility and so less risk than their competitors. We find an apparent mispricing of lower risk in market returns as standard asset pricing models may not be pricing investors’ aversion to climate change risk and preference for firms actively combating climate change. This lends support to Fama and Frenchs’ theory that says that these “tastes” are valid factors to provide a more complete asset pricing model. Our study encourages investment in UNGC-CCC firms as we find there is no underperformance penalty against a conventional portfolio because the lower return reflects lower risk. Thus, our evidence suggests that “doing good for society is also good for business.”

Principles of the United Nations Global Compact

The United Nations Global Compact represents one of the biggest voluntary initiatives under the United Nations organisation. This initiative was founded in 2000. It is strongly connected with Corporate Social Responsibility and efforts in achieving sustainability as it is a call for businesses worldwide to contribute towards sustainable world development in economic, social as well as environmental areas. Until last year, when the UNGC celebrated its 20th anniversary, it already had over 11,500 participants all around the world. This fact can have significant impact on achieving its goals which were set in the form of 10 principles divided into 4 main areas, where the positive and sustainable operating of business as well as other types of organisations is much than needed today. Therefore, in the text of this subchapter, the basic information about the very Global Compact initiative is presented, as well as its 10 universal principles set in the areas of human rights, labour standards, environment and anti-corruption, through which the participants are required to take strategic actions in achieving broader societal goals, mainly current Sustainable Development Goals, the interconnection of which is also presented and highlighted. The aim is to help understand the importance of this UN initiative for creating a better and sustainable world by incorporating business and other organisations.

United Nations Global Compact: Where are we going?

Purpose In a world characterised by increasing environmental and social awareness, the number of corporate social responsibility and sustainability initiatives has significantly grown. Among these, the United Nations Global Compact (UNGC) is one of the most important, involving more than 12,000 companies. The purpose of this study is to investigate the UNGC’s worldwide diffusion, both at country and industry level, to understand the reasons leading to the highlighted dissemination patterns, and to propose various future projections. Design/methodology/approach The study pursues its objectives by applying the logistic curve model to data provided by the United Nations. The analysis is complemented by adopting instability and concentration indexes. Findings Results suggest that, while human rights and environmental safeguard in some areas and industries will remain a controversial issue, UNGC adoption will continue growing and giving the participants the required legitimacy to compete in worldwide markets. Originality/value To the best of the authors’ knowledge, this is the first paper that analyses the UNGC’s worldwide diffusion and proposes a prediction model for its future dissemination. The findings are of considerable importance in extending the knowledge of the initiative and in understanding the potential values of its adoption.

Estimating the size of the shadow economy in Poland

The shadow economy, as an interdisciplinary phenomenon, generates many controversies and difficulties for researchers. Economic entities operating within the non-observed (hidden) economy strive to escape official records, therefore a direct estimation of the extent of the phenomenon remains unobtainable. The aim of this article is to present the results of the estimation of the size of the shadow economy in Poland on the basis of the differences between GDP calculated according to the ‘production’ and the ‘expenditure’ approaches. The authors propose an original technique based on the idea of residual methods. In the course of the study, two models describing the dependencies between the growth of GDP and the growth of indicators used in the in the above-mentioned approaches to GDP calculation were established. The identified differences between the value of this measure calculated according to the production and expenditure approaches were used for the estimation of the size of the shadow economy in Poland, presented as a share in GDP. The analysis was carried out on the basis of panel data reflecting the values of selected macroeconomic indicators measured on the voivodship scale in the years 2000–2017, drawn from the Local Data Bank of Statistics Poland. The obtained results resemble to a large extent the estimates of the shadow economy by Statistics Poland and EY, and also partly that by United Nations Global Compact. The analysis presented in the paper is part of the research conducted by the Centre for Non-Observed Economy Srudies (OGN) at the Statistical Office in Kielce, whose aim is to improve the methodology currently used by official statistics in Poland.

Public-Private Governance Initiatives and Corporate Responses to Stakeholder Complaints

Multinational firms operate in multiple national jurisdictions, making them difficult for any one government to regulate. For this reason the firms themselves are often in charge of their own regulation, increasingly in conjunction with international organizations by way of public-private governance initiatives. Prior research has claimed that such initiatives are too weak to meaningfully change firms’ behavior. Can public-private governance initiatives help firms self-regulate, even if they lack strong monitoring or enforcement mechanisms? I take two steps toward answering this question. First, I introduce a new measure of firms’ performance on ESG (environmental, social, and governance) issues: the extent to which the firms issue public responses to claims of misconduct from civil society actors. Second, I argue that public-private governance initiatives allow firms to benefit from the legitimacy of their public partners, lowering the reputational cost of transparent response. Employing novel data on firm responses to human rights allegations from the Business and Human Rights Resource Center, I find that membership in the largest and most prominent initiative, the United Nations Global Compact, significantly increases firms’ propensity to respond transparently to stakeholder allegations. These results suggest a limited but important role for public-private initiatives in global governance.

Nonprofits as socially responsible actors: Neoliberalism, institutional structures, and empowerment in the United Nations Global Compact

Nonprofit and nongovernmental organizations have become prominent participants in a global organizational responsibility movement. This trend of nonprofit responsibility is puzzling because nonprofits are presumably already dedicated to the pursuit of collective well-being objectives. This article examines the nonprofit responsibility movement from a cultural perspective, whereby broader cultural changes at the level of international organizations have constructed nonprofit entities as empowered and socially responsible actors. Using the case of the United Nations Global Compact, a global framework for corporate social responsibility, the author shows how (1) the construction of cultural meanings of autonomy and decentralization in the neoliberal context, (2) existing institutional structures, and (3) the delegation of responsibility to nonprofit organizations have enabled nonprofit organizations to become active participants in the global organizational responsibility movement. This article utilizes documentary data from the United Nations as well as previously-existing interviews with United Nations officials.

Sustainable development of Russian companies participating in United Nations Global Compact

Research background: This article presents the results of a study of non-financial reporting in the field of sustainable development of Russian companies within the United Nations Global Compact initiative. Purpose of the article: The purpose of this study is to identify preferred direction of companies. We put their reports on sustainable development in Triple bottom line (TBL) areas: social, environmental and economic. In this article I also disclose conceptual foundations of sustainable development, which served as theoretical and methodological basis of the study. Methods: Analysis of the companies activities in the field of sustainable development, the results of which are reflected in corporate reports on sustainable development for 2018, 2019, 2020, which passed the non-financial audit procedures of the Russian Union of Industrialists and Entrepreneurs and are published in the reports register. Findings & Value added: The study made it possible to identify companies through the positioning of their reports on sustainable development. The study confirmed the hypothesis that non-financial reports on sustainable development are social in nature, focusing on the interests of staff and consumers, while environmental and economic aspects are given less importance. The articles also disproves the hypothesis, that the direction of the company has a significant impact on the positioning of the company. In the course of the study, it became possible to assess the companies’ support for the Global Compact initiatives.