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November 27, 2000
One Year After Seattle
by Mark Thomsen
In the year after the Seattle WTO protests, efforts to develop rules of conduct for multinationals
continue to grow.
SocialFunds.com --
The size and ferocity of protests at the World Trade Organization (WTO) meeting held in Seattle,
Washington from November 30 to December 3, 1999 amplified public scrutiny of the globalization
process. These protests, the instantaneous flow of news, and the availability of options for social
and environmental reporting are intensifying pressure on corporations to account for the social and
environmental effects of their business practices.
 The past year has seen increased efforts
to develop rules of conduct for multinationals. The UN's Global Compact grabbed headlines this
summer when almost 50 global corporations agreed to voluntarily support its precepts. Companies
that signed on include BP Amoco, Unilever and DuPont. The Compact has nine principles that
encompass human rights, labor and environmental concerns.
Establishment of the Global
Compact was announced by Kofi Annan, UN Secretary General, in Davos in January 1999. While the
intention of the Compact is generally admired, some critics scoff at the idea, saying
multinationals cannot be trusted to monitor themselves. Since the Compact is still in its infancy,
its effectiveness cannot yet be verified.
One non-governmental organization has gained
much respect for its work in helping companies help themselves to become more socially responsible.
Business for Social Responsibility (BSR), founded in 1992, is a U.S.-based organization that offers
its member expertise which addresses a wide range of corporate responsibility issues.
BSR
held a national conference in New York this month entitled "Adding Value: Strengthening Corporate
Social Responsibility Strategies." The diverse audience ranged from small companies to global
conglomerates. The interest in these issues is demonstrated by the fact that the number of
attendees had to be limited to 1,000.
Hand-in-hand with rules of conduct for
multinationals goes transparency. Just as companies must use standard accounting procedures to
report their financial performance, there are efforts to create standards for reporting a
combination of financial, social and environmental performance.
The chief movement for
establishing this global standard is the Global Reporting Initiative (GRI). GRI is building on
accepted accounting procedures to formulate what it calls "sustainability" reporting. It has
already finished a test pilot phase and revised guidelines were released in June 2000. GRI is to be
established as permanent body by 2002.
A private firm in Sweden is not waiting for the
permanent establishment of GRI. Global Responsibility Scandinavia AG is developing its own
standards for social and environmental reporting and aims to be a clearinghouse for such
information. Its main product has been dubbed the "Global Responsibility Communication Platform".
The Platform is Internet-based and will provide free access to corporate environmental, health and
safety data, social and ethical policies and practices, financial performance data, sustainability
measures for products and services, and industry-specific sustainability performance indicators.
Global Responsibility initially worked on the Platform with a group of companies it has
called their "pioneering partners." This group of partners includes large multinationals such as
Sony International (Europe) and Volvo Car Corp. Global Responsibility held "The Global
Responsibility Founding Forum" this month in Monaco, and has plans to make it an annual event. The
goal of the forum is to foster a corporate culture based on transparency and accountability.
These initiatives have not quelled the protests, however. There were demonstrations at the
World Economic Forum in Davos less than two months after Seattle. When the World Bank and the
International Monetary Fund (IMF) held a conference in Washington, D.C. in April, the protests were
peaceful yet still made a profound statement. And then at a September World Bank/IMF meeting in
Prague, Czech Republic, protests again turned violent. The demonstrators throwing Molotov cocktails
and stones, however, were believed to consist largely of hard-core anarchists.
These
demonstrations are demanding, albeit indirectly, that corporations report social and environmental
performance to investors, customers, employees, local communities and other stakeholders.
Forward-thinking companies are already making such information available, while others are dragging
their heels. In the end, the laggards may find out the hard way that corporate responsibility is
simply good business.
©
SRI World Group, Inc. All Rights Reserved.
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