ESG Reporting

The UN Global Compact (UN GC) and its meaning

May 12, 2022

Launched in 2000 by the then UN Secretary-General Kofi Annan, the UN Global Compact is an initiative aimed at businesses worldwide that promotes the adoption and implementation of sustainable practices. The UN initiated this program in the hope that it would “give a human face to the global market“. With more than 15,000 companies and more than 3,800 non-business participants, according to the UN Global Compact, it is today’s world’s largest corporate sustainability initiative.

What is the UN Global Compact and who is it for?

The UN Global Compact (GC) is a voluntary association between companies, organizations, and the United Nations. The UN GC provides a common language for corporate responsibility and a framework to guide all businesses, regardless of size, type, or location. In total, the Global Compact comprises ten principles that call on participating companies and organizations to uphold their commitment to human rights, fair working conditions, environmental protection, and anti-corruption.

The Global Compact pursues two complementary goals:

  1. The ten principles are to be integrated into corporate action at the global level

  2. Measures are to be promoted that support the general goals of the UN (e.g., Sustainable Development Goals)

The ten principles of the UN Global Compact

Human Rights

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

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


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

4. the elimination of all forms of forced and compulsory labor

5. the effective abolition of child labor; and

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


7. Businesses should support a precautionary approach to environmental challenges;

8. undertake initiatives to promote greater environmental responsibility; and

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


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

Reporting practices in accordance with the UN GC

A critical facet of reporting practices is the measurement and disclosure of non-financial factors regarding environmental, social, and governance issues. An important aspect in the process of sustainability reporting is materiality assessment, a method used to identify those elements that have a de facto impact at different levels (e.g., ethics, values, climate action, data security, social inclusion, or water management).

In some cases, companies have difficulties in prioritizing material ESG topics. Find out about five common mistakes to avoid in your first ESG report.

Why companies should consider the principles of the UN Global Compact

Sustainability management within a company is based on its value system and a principles-based approach to all its business activities worldwide. This means that business operations have to meet the needs of the company and its stakeholders as well as at least basic responsibilities in the areas of human rights, labor, the environment, and anti-corruption.

Responsible and forward-thinking businesses should adhere to the same values and principles in all areas of activity. By voluntarily participating in the UN Global Compact and incorporating the ten principles into their policies, strategies, and processes, companies not only fulfill their responsibility to society and the planet, but also create the foundation for long-term corporate success.

Are you interested in joining the UN Global Compact? There are around 70 local networks of the Global Compact advancing the initiative and its ten principles at a country level. These networks can help your company or organization to understand and implement the sustainability approach of the UN GC in national context.

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