What are the UNGC 10 Principles and why do they matter?

December 11, 2020

The UNGC 10 Principles are a set of principles that guide business policy and conduct. They also establish a common ethical and practical framework for those organisations that commit to the voluntary initiative. The 10 principles were finalised in 2004 and fall under four areas: human rights, labour, environment and anti-corruption. 

Human Rights

Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and

Principle 2: make sure that they are not complicit in human rights abuses.

Labour

Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;

Principle 4: the elimination of all forms of forced and compulsory labour;

Principle 5: the effective abolition of child labour; and

Principle 6: the elimination of discrimination in respect of employment and occupation.

Environment

Principle 7: Businesses should support a precautionary approach to environmental challenges;

Principle 8: undertake initiatives to promote greater environmental responsibility; and

Principle 9: encourage the development and diffusion of environmentally friendly technologies.

Anti-corruption

Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery. 

The UNGC emphasise that the human rights, labour, environment and anti-corruption principles must be both respected and supported. It is important to note that neglecting responsibilities attached to these principles cannot be offset by efforts to promote these same principles through, for example, PR efforts or philanthropic programmes. If companies do not fully take on board the 10 Principles, there is a risk that they could be “giving with one hand and taking with the other”. 

To ensure that organisations can fully take on responsibility, the UNGC has a vast set of resources to help businesses share information, engage in dialogue and take action to promote progress towards a more sustainable world. These include action platforms, an online UN Business Action Hub and a reporting partnership with GRI

Those organisations that are committed to the UNGC 10 Principles are required to produce an annual Communication on Progress (COP), detailing efforts to integrate the principles into operations and policies. 

Why do the UNGC 10 Principles matter?

Source: UNGC

The UNGC 10 Principles matter because they underpin the UN’s Sustainable Development Goals. The 17 UN SDGs are the blueprint to achieve a better and more sustainable future for all, with the intention of all being fully achieved by 2030. They address the global challenges we face, including those related to poverty, inequality, climate change, environmental degradation, peace and justice. 

For a company to be truly sustainable it must ensure that its values and culture align to achieve this goal. John Ruggie, one of the architects of the UN Global Compact and the UN Guiding Principles on Business and Human Rights, has expressed concern that unless business action relating to the SDGs is grounded in principles, companies will be “quick to jump to promotional initiatives, skipping the essential starting point of reducing negative impacts on people associated with their own business activities and value chains.” Without established principles, the achievement of the SDGs moves further out of our reach. 

For those organisations that are committed, however, there is evidence that they perform significantly better on sustainability. This is because the UNGC 10 Principles sets the baseline and basic conditions for individuals as well as organisations to “do good”. On top of this, public commitment to the initiative holds organisations more accountable, rather than if goals were only shared internally. Transparency and public reporting is key to show organisations’ commitment and actions towards sustainability.

There are over 9,000 businesses and 3,000 non-businesses in over 160 countries who are currently aligning with the 10 Principles, and this number is growing. Not only is there a growing moral imperative to do business responsibly, it is also increasingly recognised that good records on human rights, labour, environment and anti-corruption will serve organisations well, supporting improved business performance. The UNGC 10 Principles stand at the centre of corporate responsibility and any organisation that considers itself seriously committed to sustainability should wholly embody them.