Report: Companies Committed to UN Global Compact Perform Better Across Supply Chains

EcoVadis, a provider of business sustainability ratings, has published a new report on sustainability performance comparisons between organizations who have committed to the UN Global Compact principles vs. those that have not. Taking a deep dive into performance across key themes of environment, labor and human rights, business ethics and sustainable procurement, EcoVadis found that committed companies perform better across their supply chains.

After assessing 20,000 companies on their sustainability performance, EcoVadis found encouraging evidence that companies who adopted the UN Global Compact Principles are stepping up to the challenge — mitigating corporate social responsibility (CSR) risks within their operations and moving the needle to a more sustainable future.

The report’s major takeaways:

• Companies committed to the UN Global Compact principles have, on average, better sustainability performance: The findings demonstrate a clear correlation between advanced CSR performance and UN Global Compact participation. That said, participation in the UN Global Compact does not lead to advanced CSR performance in and of itself.
• Among UN Global Compact participants, small and medium-sized companies demonstrate better performance compared to large ones. This may be due to the fact that small- and medium-sized companies can act faster when addressing CSR issues.
• Companies perform significantly better in labor, human rights and environmental themes, compared with the ethics and sustainable procurement themes.
• Sustainable procurement and environment themes have the greatest gaps between UN Global Compact participants and nonparticipants. This gap may be linked to the need for explicit executive-level commitment to make investment in environmental and sustainable procurement programs. Such commitment is a clear and deliberate part in UN Global Compact participation, and thus explains the higher performance of UN Global Compact participants.

“We must achieve the Sustainable Development Goals — for our own sake and for future generations,” said the CEO and & Executive Director of the UN Global Compact Lise Kingo. “More and more businesses are supporting the Global Goals, and now we must drive for the tipping points that will make sustainability a mainstream reality for small and large businesses everywhere. It is encouraging to see that our Ten Principles on human rights, labor, environment and anti-corruption are helping companies to improve their sustainability performance.”

Several companies have recently come forward, explaining how sustainability initiatives have helped their company financially and reputationally. Carlsberg Group is one such company. The beer giant attributed its strong 2018 results in part to sustainability and its recent initiatives. CEO Cees ’t Hart says that in 2018, the company accelerated top-line growth, improved margins, delivered a strong cash flow and reduced debt, all of which demonstrate that “we are living our purpose of brewing for a better today and tomorrow, proving that successful business is sustainable business.”

How has Carlsberg Group improved costs and its impact on the environment? According to its just-released sustainability report, the company has reduced water consumption by 9% since 2015 and increased its global use of renewable energy to 46% (up 5% since 2015). In Western Europe, 100% of its electricity comes from renewable resources. This renewable energy comes from sources like biogas, biomass, solar, wind and hydro, the company says.

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