I have had great interest in the UN Global Compact (UNGC) ever since suggesting a somewhat more extensive compact to the UN in the early 1990s. Of course many people contributed to shaping the compact that was eventually launched by then UN Secretary General Kofi Annan in 2000.

Nevertheless, when one thinks of the UN and business these days, the UNGC is the most prominent.  As of mid-2009, the UNGC had 6,985 signatories to its 10 principle – 5,206 from business and 1,779 from civil society and other non-business organizations and has representatives. Over 135 countries are represented; by far, the largest groups of business participants are from Europe, followed by Latin America and Asia. 

The UNGC, according to its website is a strategic policy initiative for businesses that are committed to aligning their operations and strategies with 10 universally accepted principles in the areas of human rights, labor, environment and anti-corruption.  In fact, the principles refer largely to the external stakeholders of a company rather than a systematic strategic view, as suggested by many CSR proponents (see for instance, CSR on BCLC Blog). 

So when commentators refer to the UNGC as the UN’s approach to CSR, one should be wary of the limited approach adopted, while being happy that many CSR issues are being seriously considered.

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Much of the world’s media concentrates on future catastrophes such as global warming and consequent results on civilisation.  In recent years, the current and continuing catastrophe of billions living in abject poverty has attracted a different form of attention from a surprising quarter — private business and, in particular, major corporations.

In the past, famous corporate benefactors ranging from Rockefeller to Ford developed their foundations to help the world’s poor.  Today this tradition continues with Ted Turner, Bill Gates and Warren Buffett, just to name a few.  Yet, under the guise of corporate citizenship (or corporate responsibility) a new consciousness of corporations has arisen with serious consideration on how to help the world’s poor and achieve the Millenium Development Goals.  Many, if not all, of the Fortune top companies now have activities aimed at both emerging markets, where most of the poor live, as well as our own so-called advanced countries which have not completely rid their own societies of poverty.

As Michael Porter and Mark Kramer highlighted in their path breaking article in the Harvard Business Review a few years back (the link between competitive advantage and CSR), successful corporations need a healthy society and a healthy society needs successful companies. 

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We hear a lot about the World Bank (“The Bank” to most international development workers), even though it is not a bank like Citibank.  What is less known is that The World Bank Group actually consists of five institutions:  the biggest is the International Bank for Reconstruction and Development (IBRD),  followed in size by the International Finance Corporation (IFC), the International Development Association (IDA), the Multilateral Investment Guarantee Agency (MIGA); and, finally, the International Center for the Settlement of Investment Disputes (ICSID).

The World Bank Group’s stated mission is to fight poverty. Purists might say that there are enough wars already without another ‘fight,” although this is not what the World Bank means, of course, as it ‘helps people to help themselves and their environment by providing resources, sharing knowledge, building capacity, and forging partnerships in the public and private sectors.’  Around 10,000 professionals work for The Bank in Washington, D.C., and their 100 offices around the world, of which around 3,000 work for the IFC.

Much less known than The Bank, the IFC describes itself as ‘the largest multilateral financial institution investing in private enterprises in emerging markets, with activities in 130 countries.’ It is sometimes known as the private sector arm of The Bank. 

The financial crisis has shrunk credit availability to the private sector, including in developing countries. IFC plans to step into the gap, but there are questions about its likely development impact and implementation of environmental and social safeguards …

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The United States Agency for International Development (USAID) is the biggest development agency in the world in terms of foreign assistance spending.  According to the Organisation for Economic Cooperation and Development (OECD), the largest donors in 2008, by volume, were the United States, Germany, the United Kingdom, France, and Japan. 

In 2008, net official development assistance (ODA) by the United States was $26 billion, of which USAID managed around $14 billion.  To deliver this package in 2008, the total number of USAID staff was approximately 8,000 individuals – of whom 2,500 were permanent staff members.  There is, currently, an overall goal to double these staffing numbers by 2012.

USAID delivers foreign assistance programs in the areas of economic growth, agriculture, education, health, food security, and good democratic governance, mainly through its 88 missions in developing countries.  A main private sector focus has been to increase the capacity of financial institutions to lend to small businesses – totaling $1.5 billion in FY 2008. 

The relation between USAID and the private sector has always been strong, particularly for its work in developing markets. 

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