J Bus Ethics (2014) 122:209–216 DOI 10.1007/s10551-014-2216-6
Global Sustainability Governance and the UN Global Compact: A Rejoinder to Critics Andreas Rasche • Sandra Waddock
Published online: 21 May 2014 Springer Science+Business Media Dordrecht 2014
Abstract This article takes the critique by Sethi and Schepers (J Bus Ethics, 2013, in this thematic symposium) as a starting point for discussing the United Nations (UNs) Global Compact. While acknowledging the relevance of some of their arguments, we emphasize that a number of their claims remain arguable and are partly misleading. We start by discussing the limits of their proposed framework to classify voluntary initiatives for corporate sustainability and responsibility. Next, we show how a greater appreciation of the historical and political context of the UN Global Compact puts several of their claims into perspective. Finally, we demonstrate that the alleged promise– performance gap rests on a selected and one-sided reading of the initiative. We close by pointing to some challenges that the initiative needs to address in the future. Keywords United Nations Global Compact Business regulation Corporate sustainability and responsibility Public–private partnerships Soft law Sethi and Schepers (2013) present a strongly worded critical assessment of the United Nations (UNs) Global Compact—a critique that focuses mostly on what they term the ‘‘promise–performance gap.’’ Of course, some of the critique has been around since the inception of the UN
A. Rasche (&) Copenhagen Business School, CBS Centre for Corporate Social Responsibility, Porcelænshaven 18A, 2000 Frederiksberg, Denmark e-mail:
[email protected] S. Waddock Boston College, Carroll School of Management, Chestnut Hill, MA 02467, USA e-mail:
[email protected]
Global Compact. Their paper echoes long-standing concerns raised by some NGOs, trade unions and academics that, despite the moral authority inherent in the UN, insufficient attention is being paid to assurance of conformity to the principles (Deva 2006; Nolan 2005). Further, their analysis also criticizes the Compact’s openly acknowledged stance that it is an aspirational principlebased venture rather than a monitoring, accrediting, and enforcement vehicle. While we welcome and respect their views, especially since critique is a necessary component of academic discourse and a driver of further improvements in practice, a number of their claims remain arguable and are, from our perspective, partly misleading. Our objective is to constructively comment on the claims presented by Sethi and Schepers (2013) and to connect them to the broader scholarly debate around the UN Global Compact. While we do not believe that there are ‘‘definite answers’’ to the questions identified by Sethi and Schepers, we think it is worthwhile to clarify where it is possible to agree with their view and where the two of us, at least, do not agree. We want to point out from the start that we do not believe that the UN Global Compact is an initiative without problems (see our comments on challenges toward the end). Rather, we aim to show that some of the presented critique is misleading insofar as it neglects the main mission of the initiative as well as its historical and political roots. Our analysis proceeds as follows. In the first section, we comment on Sethi and Schepers’ framework for classifying voluntary initiatives for corporate sustainability and responsibility. We suggest that some of the misconceptions inherent in their critical analysis are based on this framework. Next, we show how paying closer attention to the historical and political roots of the UN Global Compact helps to paint a more differentiated picture of the initiative;
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a picture which allows us to see some of the arguments from another perspective. The third section shows that the identified ‘‘promise–performance gap’’ rests on a selective and one-sided reading of the initiative. Although it is clear that implementation gaps exist, we argue for a more balanced view, bearing in mind the Compact’s achievements and future challenges.
Classifying Voluntary Initiatives for Corporate Sustainability and Responsibility Sethi and Schepers (2013) offer a framework to distinguish different types of voluntary ‘‘codes’’1 dealing with corporate sustainability and responsibility. While such a framework is certainly necessary and timely, particularly given the proliferation of voluntary initiatives (Waddock 2008), it is questionable whether this particular framework provides a good point of departure for organizing the debate. In fact, some of the misguided critique of the UN Global Compact may be due to the framework’s inability to clearly distinguish the purpose of voluntary initiatives. In particular, we see two points that deserve further discussion and clarification. First, one of the framework’s dimensions consists of two categories, as it classifies initiatives according to the ‘‘specificity and materiality of the voluntary code provisions and strength of governance and implantation structures.’’ The problem is that initiatives vary greatly when it comes to these different categories making an aggregated judgment along one single dimension difficult. In other words, the categories exist independent of each other. For instance, it is hard to see how the specificity of the rules underlying a particular initiative would always yield a specific governance structure (e.g., initiatives with less specific rules do not necessarily share a common governance structure). It seems that it would be quite possible for there to be ineffective or effective governance systems of either highly specific or broadly general principles; thus, these categories are not necessarily as interdependent as their placement in the framework would make them seem. Second, although the authors argue that ‘‘all types of codes are indeed relevant in their specific context, and serve important business purpose as well as issues of public concern’’ (Sethi and Schepers 2013, p. 7), the framework seems to implicitly privilege initiatives that verify 1
The term ‘‘code of conduct’’ may be misleading in this context, especially when discussing the UN Global Compact. Although the term is defined in different ways (Leipziger 2003), it is often used to describe company-specific self-regulation (e.g. codes to govern a firm’s supply chain) or refers to certification and auditing programs that monitor compliance against predefined standards (e.g. Social Accountability 8000).
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compliance (e.g., via audits) and are highly focused in terms of the addressed issues. Examples of such initiatives include, but are not limited to, the Forest Stewardship Council, Social Accountability 8000, and the Fair Labor Association (Bernstein and Cashore 2007; Rasche and Esser 2006). Without doubt, such initiatives play an important role in addressing social and environmental problems in particular contexts. However, arguing that such initiatives reflect ‘‘the best framework for creating a voluntary code of conduct that is both efficient and effective’’ (Sethi and Schepers 2013, p. 6, our emphasis) shows that the introduced taxonomy rests on the assumption that meaningful change can only be achieved through certification programs working on specialized issues. Given this prejudgment, it is not surprising that the UN Global Compact falls into a sector that is criticized for producing initiatives with ‘‘little practical usefulness in achieving their proffered purpose’’2 Sethi and Schepers 2013, p. 6. In the end, the framework’s criteria seem explicitly designed to place the Compact into the ‘‘low/low’’ sector. Even though Sethi and Schepers emphasize that their intention is not to distinguish between strong and weak initiatives, the framework tends to give this impression. For example, initiatives in sector A are characterized as having participants who are ‘‘inclined to accept accountability for performance,’’ while initiatives in sector D are described as having requirements which are ‘‘essentially symbolic and do not require significant action from members.’’ (see Fig. 1 in their analysis; Sethi and Schepers 2013, p. 5). Assessing the UN Global Compact based on this framework leads to a tautology: i.e., the critique of the Compact cannot be disproved when sticking to this framework, because the framework itself already contains a value judgment by favoring certification-driven programs with a small member base over more open principle-based initiatives aimed at strengthening the ‘‘soft law’’ environment that has developed around corporate responsibility. It seems odd to assess the Compact on this ground, as the initiative is criticized for something it never pretended or intended to be (Rasche 2009; Ruggie 2002). Adopting a different institutional design in which a small group of participants addresses a single social or environmental issue is unsuitable for a UN initiative that strives to raise sustainability performance across regions, industries, and 2
Although Sethi and Schepers (2013) argue that such initiatives have ‘‘little practical usefulness’’, they also admit that it is possible ‘‘to make them work.’’ Our claim that their framework remains biased rests on the assessment of the different sectors presented in Fig. 1. Here, initiatives that have a diversified/large participant base and rest on broader principles are accused of (a) producing mostly symbolic commitments and no substantive actions, (b) having a flawed governance structure (i.e. one favouring insiders), and (c) promoting rhetorical reporting.
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issue areas. The core idea underlying the Compact is to let business and nonbusiness participants commit to ten universal principles and broader UN goals. By their very nature, these principles transcend different sustainability issues and can be adopted by a diverse set of actors (e.g., small and medium-sized enterprises [SMEs], larger corporations, and NGOs). We agree with Sethi and Schepers that there are different types of voluntary initiatives to promote corporate sustainability and responsibility. However, while they see a certain set of initiatives as being more effective than others, we emphasize that their effectiveness needs to be judged against their intended purpose, institutional design, and operational constraints. Progress in terms of addressing global social and environmental issues can be achieved in different ways, and it is vital to recognize that voluntary, like regulatory, initiatives have advantages and disadvantages. The existence of general principles, like the UN Global Compact’s, provides a platform for working on issues that apply to all businesses and contexts—and from which more focused industry-specific initiatives can derive. The Compact thus provides a broader context than a more particularized initiative can to set a moral framework of expectations and aspirations for businesses, and other entities, to live up to. What it cannot provide is a tool to regulate corporate behavior via monitoring.
The Historical Roots of the UN Global Compact The Role of UN Agencies and Civil Society Sethi and Schepers argue that the UN Global Compact was setup without much support of UN agencies and civil society organizations and that this lack of support continued throughout the entire history of the initiative. Having lost the support of the UN agencies and major civil society organizations, the UNGC was reduced to depending largely on the support of business organizations. It promised companies ‘‘all the prestige’’ of the UN for the simple act of becoming a signatory with a vague promise to embed the ten UNGC principles in their operations3 (Sethi and Schepers 2013, p. 10). 3
Since the UN Global Compact is by no means a seal of approval for corporate actions, it has adopted a logo policy to prohibit the misrepresentation of participants’ engagement in the initiative. The logo cannot be used ‘‘in any manner that suggests or implies that the Global Compact Office has endorsed or approved of the activities, products and/or services of the organization, or that the Global Compact Office is the source of any such activities, products and/or services.’’ (UN Global Compact, 2013) The use of the general UN emblem for commercial purposes is prohibited as well.
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It seems odd to claim that the UN Global Compact lacks support from UN agencies as well as civil society, particularly given the degree of interaction between the Compact and organizations from both spheres. The initiative has collaborated with UN agencies in multiple ways over the years. Examples include, but are not limited to, (1) the collaboration with the United Nations Environment Programme (UNEP) and the United Nations Framework Convention on Climate Change (UNFCCC) to set up Caring for Climate, a platform supporting businesses in developing climate change policies; (2) the collaboration with the United Nations Children’s Fund (UNICEF) to launch the Child Labour Platform, designed to share experiences related to the elimination of child labor; and (3) the collaboration with the United Nations Entity for Gender Equality and the Empowerment of Women (UN Women) to create the Women’s Empowerment Principles, outlining best practices to promote gender equality in the workplace. UN agencies are also involved in the Compact through a so-called Inter-Agency Team. This team consists of those agencies that are entrusted with the intergovernmental declarations from which the ten principles were derived. The main objective of this team is to ensure coherence between the activities of the Global Compact Office and the different agencies—a necessary task when looking at the increasing number of UN-business partnerships (Reed and Reed 2009). By now, most UN agencies have installed Private Sector Focal Points that manage interactions with the private sector. These Focal Points meet regularly (organized by the UN Global Compact). Of course, collaboration between the UN Global Compact and UN agencies is by no means perfect and can still be improved (Utting and Zammit 2006). However, claiming that the initiative is not supported by other UN agencies is incorrect and misleading. Further, the work of the Compact has been recognized multiple times by UN General Assembly Resolutions (latest see A/C.2/68/L.24 dated October 2013). A similar line of argumentation holds for the support by civil society organizations. Major and well-respected NGOs have backed the Compact in different ways, for instance by participating in relevant working groups, by engaging in local networks, and by initiating partnerships with businesses and UN agencies (Grajew 2010; Whelan 2010). For instance, Transparency International has been supporting the Compact’s work on anti-corruption, while organizations like Oxfam America and Social Accountability International have been involved in the human rights working group. Also, the UN Global Compact has collaborated extensively with the Global Reporting Initiative in developing its reporting framework. This is not to say that all NGOs enthusiastically embrace the idea of collaborating with the private sector through multi-
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stakeholder initiatives like the UN Global Compact. The NGO landscape is heterogeneous, including global and local organizations with different agendas and resources (Yaziji and Doh 2009). Some NGOs reject the idea underlying the Compact as a matter of principle. However, it is misleading to conclude from this that civil society organizations in general do not support the initiative. On the contrary, out of the 4,100 nonbusiness participants, almost 50 % represent global or local NGOs (as of March 2014). Motivations for Creating the UN Global Compact Sethi and Schepers (2013, p. 1) claim that the UN Global Compact was created to ‘‘leverage UN prestige’’ and ‘‘induce corporations to embrace 10 principles.’’ These assertions are incorrect and do not accurately reflect the unique historical context of the initiative. To better understand this context, it is useful to discuss how the relationship between the UN and transnational corporations (TNCs) has evolved (Sagafi-nejad 2008). Previous attempts of the UN to engage with the private sector relate to the UN Centre on Transnational Corporations (UNCTC), which was established in 1974 and abolished in 1992. One key task of the UNCTC was to develop the UN Code of Conduct on Transnational Corporations. However, progress on the Code was slow. Due to the unwillingness of governments to extend authority to the UN to deal with TNCs, the Code was never implemented and disappeared from UN records by 1994 (Coleman 2003; Kell 2013). The idea of policing the behavior of TNCs through the Code also reflects the openly hostile attitude of the UN toward business at that time. The resulting confrontational approach limited the institutional capacity of the UN to engage with the business community (e.g., in terms of missing knowledge, skills, and operational procedures; Tesner 2000). Building this institutional capacity was one motivation behind the introduction of the Compact. From 1994 onwards, there was a slow shift in attitude toward TNCs within the UN—a shift from a reactive strategy trying to police the behavior of businesses toward a more proactive strategy focused on the contributions of firms to development (Coleman 2003, p. 350). The agenda moved from confrontation to partnership and collaboration. This is most evident in the speech given by then SecretaryGeneral Kofi Annan at the World Economic Forum in Davos in 1999. This speech proposed a ‘‘global compact’’ to the global business community (which was operationally launched in 2000). The speech was built around the acknowledgement that ‘‘the goals of the United Nations and those of business can, indeed, be mutually supportive’’ (United Nations 1999). Speaking to the business community in Davos, Annan made clear that values for global
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markets cannot be enforced through the international policy arena alone, but that a ‘‘second way you can promote these values is by taking them directly, by taking action in your own corporate sphere’’ (United Nations 1999). He reminded businesses that global markets cannot function without a strong and cohesive network of values. The pact that he was proposing encouraged businesses to contribute to the governance and stability of the emerging global economy by living up to core human values, especially in those cases where nation states were not willing or able to protect these values. The UN Global Compact was not only created in times of changing UN-business relations, but also in a context of more apparent gaps in global governance (Rasche and Kell 2010). This context was, and still is, characterized by an increasing flexibility of the operations of multinational corporations (Ghemawat 2003), a weak capacity of nation states to address cross-border social and environmental problems (Scherer and Palazzo 2008), a higher engagement of corporations in public policy issues (Moon et al. 2005), a dominance of financial interests over societal and ecological priorities (Davis 2009), and an imbalance between the existence of enforceable rules for trade liberalization and non-enforceable rules for the promotion of sustainable development (Ruggie 2002). While the Compact was never intended as a total solution to all these problems, it has helped to overcome outdated ideologies between business, the UN, and civil society. Under the roof of the UN system, the initiative has created a space for dialog, learning, and partnership helping formerly discordant parties to explore common ground. To conclude, the UN Global Compact was neither set up to give businesses ‘‘all the prestige’’ of the UN nor was it created to ‘‘leverage UN prestige’’ or ‘‘induce businesses to embrace 10 principles,’’ as Sethi and Schepers (2013, p. 1) claim. The initiative was formed out of the necessity to include firms more directly into the governance of global markets, particularly since the effectiveness of state-based solutions in the international policy arena remained limited. The deal underlying the initiative is not a ‘‘Faustian Bargain,’’ as argued by Sethi and Schepers (2013, p. 9). It is a different kind of deal—a compact between parties who recognized that collaboration is mutually beneficial and critical to their jointly shared future success.
The Promise–Performance Gap Sethi and Schepers’ (2013, p. 15) argument rests on the claim that ‘‘the UNGC has abandoned any effort to sustain its core mission of embedding the ten UNGC principles on companies’ core business activities.’’ Hence, a gap between the promises made by the initiative and
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participants’ actual performance opens up.4 Although their discussion points to some critical questions and concerns, it is also necessary to put some of their arguments into perspective.
replied to the report pointing to a number of misunderstandings and omissions (UN Global Compact 2011b; see also the UN Secretary-General’s comment on the report, A/66/137/Add.1).
Promises and Performance: A Selected Perspective
Growth by Numbers: Why Quality and Quantity Matter
Although it is difficult to judge the achievements of the UN Global Compact, as its value needs to be judged on multiple interrelated dimensions (e.g., related to participants’ implementation performance and the impact of learning), the analysis by Sethi and Schepers is based on a selective and one-sided reading of relevant sources. For instance, they argue that the Compact made ‘‘optimistic but unsubstantiated statements about progress’’ (Sethi and Schepers 2013, p. 15), while looking back at its own achievements. Although we agree that the initiative adopts an optimistic and forward-looking tone when evaluating its progress (as most initiatives would do), it has never declared victory or neglected its own challenges. For instance, the Compact’s Executive Director, Mr. Georg Kell, commented in the 2010 Annual Report that ‘‘we are far from a critical mass, nor have we seen the depth of action needed to right the course and adequately address the world’s most pressing challenges’’ (UN Global Compact 2011, p. 6). This report also shows that several implementation gaps exist, for instance, with regard to recording facilitation payments in the context of anti-corruption. It is also surprising that the authors claim that the initiative provides no meaningful information to indicate in how far participants’ performance has changed over time, since the Compact has been publishing annual implementation surveys since 2007. Although these surveys are no perfect measure for progress, mostly because the underlying information is based on self-reported data, they allow interested parties to review/benchmark progress and to identify implementation gaps. While assessing the initiative’s performance, Sethi and Schepers also point to the report by the Joint Inspection Unit (JIU), which represents an external review body of the UN. This report highlighted a variety of challenges and pointed to areas of improvement that would increase the Compact’s effectiveness (JIU/ REP/2010/9; UN Joint Inspection Unit 2010). However, the discussion fails to mention (a) that some of the recommendations were implemented even before the report was published and (b) that the Global Compact Office
We agree with Sethi and Schepers (2013) that participant numbers are indeed not a sufficient proxy measure for impact. Transformational change is only achieved if qualitative and quantitative growth is balanced—i.e., if more participants engage in the initiative, learn from others, and improve their performance (Brugger and Maurer 2010). However, whereas Sethi and Schepers (2013, p. 15) understand quantitative growth as a ‘‘deceptively simple alternative to claim success,’’ we stress that participant growth is needed if the Compact wants to transform the way markets work. Despite the nearly 8,000 business participants to date (data as of March 2014), this group represents a small subsample of the population of corporations to whom fundamental principles like those articulated by the UN Global Compact in theory should apply. Estimates of around 82,000 transnational corporations (UNCTAD 2009) and hundreds of thousands of subsidiaries, with millions of small and medium-sized enterprises in the world make even the growing number of Compact participants pale. The rather impressive growth of signatories per year is due to, among other things, the lack of high entry barriers. Sethi and Schepers criticize this approach arguing that the Compact attracts those firms with a weak social and environmental track record (as they are in need of a better image). While a lot can be said about why such a claim is misleading (Williams 2004), we want to briefly explain why it makes sense to maintain low entry barriers. If the initiative would start selecting participants, this could be misunderstood as the UN directly endorsing a certain set of companies. The current political mandate of the UN Global Compact does not allow carrying out such judgments (see A/C.2/68/L.24). In addition, eligible companies would most likely come from countries with well-developed corporate responsibility infrastructures and sufficient resources (see the analysis by Knudsen 2011). Of course, such an institutional design runs counter to the very idea of the Compact—i.e., to act as an open learning platform for businesses from all parts of the world with different levels of experience and resources.
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Although not core to the argument, we want to emphasize that, strictly speaking, two points seem to contradict each other. On the one hand Sethi and Schepers (2013) argue that ‘‘private sector signatories do not find enough value (in the UN Global Compact) to justify their financial support (to the Foundation for the Global Compact),’’ while on the other hand they claim that companies reap valuable reputational benefits from the initiative.
The Heart of the Debate: What is the UN Global Compact? Sethi and Schepers (2013), like many NGOs, trade unions and other critics, seem to refuse to accept: (1) the
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aspirational nature of the principles and the learning-based purpose of the Compact, (2) the reality that it is and was not intended to compete with voluntary standards that regulate corporate behavior, but rather was formed as a complement to such initiatives, and (3) that it provides a place where issues and ideas that are difficult for companies to deal with independently can be discussed, debated, and incorporated voluntarily as part of corporate practice. Underlying much of this argument is the belief in a dichotomy between initiatives that regulate business activity versus principle-based initiatives aimed at learning and continuous improvement. While the former are deemed to be effective, the latter are classified as being largely about rhetorical commitments. This dichotomy overlooks the complementary nature of different types of regulation. First, the UN Global Compact never purported to be a total solution or silver bullet. As concluded in the final report of the Special Representative of the Secretary-General on Business and Human Rights (John Ruggie), what is needed is a ‘‘smart mix’’ of regulatory measures, including national and international as well voluntary and mandatory (United Nations 2011, p. 8). We need to better recognize the complementary nature of different kinds of voluntary initiatives and their relationship with hard law. Second, initiatives like the UN Global Compact have an important outreach and consensus building function. The more participants publicly support universal principles, the harder it is for others to sit on the fence without showing any commitment (see the study by Perez-Batres et al. 2011). Consensus building is particularly important in regions where the corporate responsibility agenda is still emerging (e.g., China and India have profited from strong Global Compact local networks). Third, the Compact acts as a framework for learning and continuous improvement; it puts issues on the corporate table that might otherwise be ignored. The UN with its moral authority and convening power helps to legitimize corporate actions in support of the ten principles—actions which otherwise might be considered the idea of a few idealists within the company. Companies grow into their corporate responsibility commitments, and the UN Global Compact offers a framework to accompany them on that journey. While firms that have just formed a corporate responsibility strategy may see the Compact as a roadmap providing orientation and legitimizing relevant activities, companies at later stages may see the Compact as a platform to initiate partnerships (AccountAbility and UN Global Compact 2013). Participation implies that a firm is willing to align its operations and strategy with ten principles; it does not imply perfection from the start. Zadek’s (2004) study of Nike outlines the underlying process of organizational learning, showing how the company moved from defensive
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actions to a position where it promoted industry-wide activities. But we also caution that learning requires that more participants show more clearly where exactly they have advanced their practices and where implementation gaps still exist. This brings us to the discussion of Communication on Progress (COP) reports. We agree with Sethi and Schepers that improving the quality of COP reports remains a challenge. However, it is important to further contextualize this claim. First, the quality of COP reports differs significantly. While some reports are excellent sources of information describing in detail where a company has taken action, other reports lack sufficiently detailed information. Hence, it is important to not overgeneralize. Second, over time the Compact has introduced incentives to better acknowledge different levels of disclosure. COP reports are differentiated into an ‘‘active’’ and ‘‘advanced’’ category, while non-reporting participants are delisted. Arguably, there is a ratcheting up process of demands in the UN Global Compact that is consistent with a learning strategy implemented over time and with the general ratcheting of standards and expectations that take place with respect to social and ecological issues (Fung et al. 2001; Rivoli and Waddock 2011). Such ratcheting up of demands needs to happen against the background of the Compact’s heterogeneous participant base, including TNCs and SMEs from different sectors and regions. We agree with Sethi and Schepers that it should, in principle, be possible for any signatory to gather the relevant information for a COP report. Nevertheless, firms’ knowledge about non-financial reporting, their regulative environment, and the available resources, as well as their size, experience and sophistication level with respect to corporate responsibility are likely to influence COP reporting. Knudsen (2011), for instance, finds that firms from Eastern Europe, Africa, and East Asia (regions where non-financial reporting is only starting to develop) have a higher probability of being delisted from the Compact. She also finds that SMEs (which often face resource constraints) have a higher probability of being delisted.
Conclusion We would like to end on where we agree and disagree with Sethi and Schepers’ (2013) critical review. We agree that the UN Global Compact is far from perfect. It is a dynamic initiative that faces challenges as much as other voluntary initiatives do. As long as power and wealth are concentrated in the hands of a relatively few powerful corporations, and as long as international regulation and enforcement mechanisms that could control the behavior of corporations with far-flung operations remain elusive, soft law mechanisms and sets of principles that set aspirational
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standards make an important and timely contribution to improved global governance (see also Scherer and Palazzo 2011). We disagree with how Sethi and Schepers frame the Compact’s challenges and the conclusions they draw from their analysis. Their final recommendation that the ‘‘most honorable approach would be for the UNGC to admit its failure and dissolve itself’’ (Sethi and Schepers 2013, p. 20) is neither realistic or constructive, nor do they offer viable alternatives that take into account the realities of today’s nation states, the political environment at the UN, and the need for collaborative problem solving. While a detailed discussion of the Compact’s challenges is beyond the scope of this paper, we still want to highlight areas where improvements are needed. First, it is necessary to better connect existing initiatives and workstreams. Due to the demand-driven growth of the initiative, various issue platforms (e.g., Caring for Climate), working groups (e.g., on human rights), and sister initiatives (e.g., the Principles for Responsible Management Education and Principles for Responsible Investment) have emerged over the years that have separate evolutionary paths, audiences, and purposes. The quality of participants’ learning will depend to some degree on how well learning and insights from these initiatives are integrated and aligned. Second, the Compact needs to scale up its participant base, while, at the same time, improving the quality, transparency, and comprehensiveness of COP reporting. Systemic changes in social and environmental problems areas are only possible if more participants engage more deeply with the initiative, realigning their strategies and business models to ensure adherence to the principles. Robust financial and nonfinancial resources as well as a further strengthening of the political mandate are important enablers in this context. Finally, the capacity of local networks to support participant engagement, learning, and implementation needs to be strengthened and, perhaps, made more consistent across networks. Local networks function in different ways, but often without a clearly articulated strategic direction. No initiative can prosper without meaningful and constructive criticism. Academic discourse depends on hearing different voices, fighting for good arguments, and producing relevant knowledge. Agreeing that there is disagreement is thus inevitable. We believe that Sethi and Schepers put forward their arguments with this sense of good will and hope that our response is understood in this spirit as well.
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