Understanding Sustainability Reporting Frameworks: A Look at the UN Global Compact Communication on Progress
As cliche as it might sound, environmental, social, and governance (ESG) is about a company’s journey, not the destination. A big part of ESG strategy is setting ambitious goals and action plans to drive impactful progress toward goals. It’s imperative to note your baseline, create targets, and measure growth along the way – so it’s no surprise that there are so many different sustainability reporting frameworks.
Whether you’re utilizing the Global Reporting Initiative (GRI), United Nations Global Compact (UNGC), or Sustainability Accounting Standards Board (SASB), reporting is a key way in which companies can maintain accountability to what they set out to achieve.
In this post, we’ll focus on the world’s largest corporate sustainability initiative, the UNGC. The UNGC–and its corresponding Communication on Progress (CoP)–is a voluntary initiative that supports companies' commitments to responsible business practices regarding governance, human rights, labor rights, the environment, and anti-corruption.
Understanding the UNGC
At the core of the foundation of the UNGC lies 10 operating principles which are designed to define a company’s business practices and value system. These principles are aligned to a myriad of global standards including the Universal Declaration of Human Rights, UN Sustainable Development Goals, the International Labour Organization Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development, and the UN Convention Against Corruption. The UNGC aims to promote an interdisciplinary, coordinated framework for a more sustainable future.
The UNGC is open to membership from any organization including businesses, civil society organizations, industry associations, and academic institutions. Participants in the UNGC represent nearly every industry sector and come equally from developed and developing countries. The requirements for member companies are simple: operate responsibly, take actions that support society, report annually, and engage locally.
Bringing these requirements to life looks different for every company, but must include a formal commitment and Communication on Progress (also known as CoP report). A commitment from companies’ chief executive officer is required for member companies and can be communicated through an annual CEO statement focused on all four sustainability areas: human rights, labor, environment, and anti-corruption.
In order to ensure accountability on these statements, an annual CoP report is also required. In previous years, this could be a part of a sustainability report or other public document but, beginning this year, the UNGC released a standardized CoP questionnaire for companies to complete.
What’s required in the CoP questionnaire?
The UNGC had previously been criticized for a lack of standardization, rigor, and comprehensive enforcement system. Allowing companies to release individual CoPs lacked the austerity that many other ESG associations delivered on. In order to combat this criticism and increase accountability, the UNGC shifted their reporting standards to an enhanced CoP platform in 2023.
With over 80 questions spanning all sustainability topics, the new CoP questionnaire clearly baselines and communicates ESG progress. This updated format empowers companies and allows them to build credibility and brand value.
After the submission period, companies will have access to an individual participant profile on the UNGC website that will be accessible to the public. With data visual integration, companies will be able to track and understand performance as well as benchmark against peers.
Benefits of joining the UNGC
There are many benefits to joining any global reporting initiative. Beyond moral imperatives and public perception, adhering to a formalized framework gives companies a real opportunity to be a part of the global movement towards sustainability. Membership to the UNGC specifically can provide the following benefits:
Resources: The UNGC offers resources for member businesses to assist in defining and implementing sustainability strategies. The UNGC library contains specialized materials including guidebooks, news on sustainability trends, and tailored insights. Additionally, member organizations have special access to the UNGC Academy, a learning platform with information promoting cutting edge and innovative approaches to sustainability. The UNGC also offers reporting training as well as an opportunity for anti-corruption certification. There is no one corporate journey to sustainability and the UNGC provides a plethora of unique, industry-specific information that encourages companies’ individual experiences.
Networking: Through UNGC membership, businesses are granted access to a network of other companies, which can produce opportunities for partnerships and coordination. Member companies can also elect to be more involved in the UNGC through participation in Action Platforms and Local Networks. Both Action Platforms and Local Network provide specialized material ranging from seminars, trainings, workshops, and consultations. In addition, the UNGC offers access to peer-learning roundtables, Sustainable Development Goals (SDG) business forums, and other unique opportunities for businesses to tap into the network. Connecting with like-mind organizations can promote sharing of best practices and inspire companies in their sustainability efforts.
Brand Recognition: Being a part of the largest corporate sustainability initiative has its perks regarding brand reputation. Businesses that are a part of the UNGC are publicly listed on the UNGC website with opportunities to be featured for additional recognition. Member businesses also have opportunities to be named as SDG Pioneers or receive Global Compact LEAD recognition, publicly signifying advanced commitment to the 10 principles.
My company is interested in becoming part of the UNGC. What’s next?
At Uplift, we have experience with various reporting frameworks, including the UNGC –and we know how to streamline the process. Understanding what data needs to be gathered, how to source that information, and what to report is our specialty. Joining any reporting framework can seem daunting, but we can support you throughout the journey. Looking to get started? Reach out for more information.
The Uplift Agency
Uplift builds strategies, programs, and communication campaigns that advance ESG in workplaces, supply chains and communities.
We know how to navigate the road ahead because we’ve already been down it – 90 percent of our team has led environmental or social programs in corporations or nonprofits. Because ESG is all we do, our services are more comprehensive and integrated than most firms.
