CSR2, Assignment 2: Term Paper. What is the United Nations Global Compact Management Model (“GCMM”)? How is the GCMM helping companies to assess, define, implement, measure and communicate a corporate sustainability strategy? Illustrate with examples. 3881 words. By Federico Werner (fedewerner@gmail.com).
1. Context: birth and development of the UN Global Compact After the end of the Cold War, in the last decade of the 20th Century, the economic forces from western societies were released from the ideological challenge that the Soviet Union posed in terms of dominance. Economic liberalism was seen as triumphant, and fueled by accelerated technologic development the largest corporations from the West now faced no restrictions for a truly worldwide expansion (May, 2006:273; McIntosh, Waddock, & Kell, 2004:14). The process of globalization was at its peak, and the predominance of economy over politics was a characteristic of this time. The influence of international organizations such as the World Monetary Fund (WMF), World Bank (WB) and the World Trade Organization (WTO) shadowed other international policy institutions such as the United Nations (UN) (Achcar, Gresh, Radvanyi, Rekacewícz, & Vidal, 2003: 7). Previous waves of globalization had occurred before, such as in the 19th Century, but the unrestricted capitalism of that time lacked completely of social legitimacy which led to two world wars. The process ‘reflected neither the needs nor the aspirations of the vast majority of ordinary people’ (McIntosh et al., 2004:16). However the current process is different because is not led by states but by companies. We have moved from an international world to a global world, where governments can no longer mediate at the border by tariffs and exchange rates. The global markets leave behind the national social bargains (McIntosh et al., 2004:16). In this context, the need for international regulations guiding the process was also peaking. The UN’s major attempt to develop a ‘code of practice’ for transnational corporations (TNCs) began in 1977 and was completed in 1990, but was fiercely opposed by the TNCs and Western governments, who did not allow it to come into force. 1