UNGC pros and cons

1. 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

2. Key drivers of UNGC
Around the world
• NGO Activism
• Responsible investment
• Litigation
• Gov initiatives
Developing Countries
• Foreign customers
• Domestic consumers
• FDI
• Government

3. 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.

4. 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

5. 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

6. CONCLUSION