UN: Firms Ignoring Social Woes Risk Stock Slide
Date: 25-Jun-04
Country: UN
Author: Irwin Arieff
"Environmental, social and corporate governance issues affect long-term shareholder value," said Espen Klitzing of Oslo-based investment group Storebrand ASA .
"So it's not just about being a good corporate citizen. It's also about achieving superior returns," he told a news conference at U.N. headquarters.
At a recent meeting with 20 of Europe's largest pension funds, all agreed that a firm's failure to look at these issues "is a problem for their investments," said Walter Kielholz, chairman of Switzerland's Credit Suisse Group .
A report on the issue by the U.N. agency, France's BNP Paribas Asset Management, U.S.-based Citigroup Asset Management, HSBC Asset Management (Europe) SA, Japan's Nikko Asset Management and others was presented at a U.N. conference of several hundred corporate, government, labor and civic leaders.
"I ask all of you to work together - business, civil society, labor and governments - and to work with the United Nations, to reduce the global risks we all face and to realize the promise of a fairer, more stable world," said U.N. Secretary-General Kofi Annan at the gathering.
Launched in 2000, the compact has grown to nearly 1,500 firms in 70 countries, Annan said, making it the world's largest voluntary corporate citizenship network.
The compact has had nine guiding principles, including using environmentally friendly technologies and ending sweatshop conditions, child labor and discrimination against minorities and women.
Compact participants adopted a new guiding principle that "business should work against corruption in all its forms, including extortion and bribery."
Ten stock exchanges announced plans to promote the U.N.-backed standards among the 3,000 companies whose shares they list, with a total market capitalization of $3 trillion.
The participating markets are Brazil's Bovespa, a group of European stock exchanges known as Euronext, and the German, Irish, Istanbul, Italian, Jakarta, Johannesburg, Luxembourg and Toronto stock exchanges.
But some labor, environmental and human rights groups criticized the compact for not ensuring that participants adhere to commitments made on the program's Web site (www.unglobalcompact.org).
"To date, businesses have not done enough to live up to the compact's principles, and there is too big a gap between rhetoric and reality," Jeremy Hobbs, Oxfam International executive director and a member of the Global Compact Advisory Council, told the meeting.
