Corporate Sustainability in the

Oil & Gas Sector:

The UN Global Compact

...

Melissa Powell

Head, Strategy & Partnerships

UN Global Compact Office

ANH Forum, 19 October, Cartagena

Why the UN & Business: Different Purposes, Overlapping Objectives

Building Markets

Good Governance

& Security

Environment

Profit

&

Growth Social Inclusion

Business

Global Health

Deepening Interdependencies

United Nations

Peace

&

Poverty

Reduction

The UN Global Compact – Overview

Launched on 26 July 2000 in New York with roughly 40 businesses Launched on 26 July 2000 in New York with roughly 40 businesses

UN Convention against Corruption UN Convention against Corruption

Rooted in universally accepted conventions:Rooted in universally accepted conventions:

Universal Declaration of Human RightsUniversal Declaration of Human Rights

ILO Declaration ILO Declaration

Rio Declaration Rio Declaration

World’s largest voluntary initiativeWorld’s largest voluntary initiative

Multi-stakeholder platform for collective action Multi-stakeholder platform for collective action

UN Global Compact – Vision and Mission

2. Take action in support of UN goals and issues 2. Take action in support of UN goals and issues

1. Make the ten principles part of business strategy,

operations and culture everywhere

1. Make the ten principles part of business strategy,

operations and culture everywhere

InternalizationInternalization

Contribution to society/

development

Contribution to society/

development

“A more sustainable and inclusive global economy.”“A more sustainable and inclusive global economy.”

VisionVision

Two ObjectivesTwo Objectives

MNCs and SMEs MNCs and SMEs

Current Facts and Figures about the GC

Over 7,000 business participants in over 135 countries Over 7,000 business participants in over 135 countries

Over 3,500 non-business - civil society, labour, academia Over 3,500 non-business - civil society, labour, academia

Equal representation in developed and developing world Equal representation in developed and developing world

Over 100 Local Networks around the worldOver 100 Local Networks around the world

All business sectors are represented All business sectors are represented

Global Compact Participants in the Oil & Gas Sector - 186

Oil and gas producers (144

total)77%

Oil and gas dis-tributors (42 to-

tal)23%

Map of Global Compact Networks

The UN Global Compact in Colombia

• Local Network formed in 2004, formal in 2009• 320 companies: 19 from the Oil and Gas Sector

(i.e Ecopetrol, Gas Natural S.A ESP, Independence S.A, Transportadora de Gas Internacional, Pacific Rubiales Energy, Surtigas S.A, Gases de Occidente, Organizacion Terpel, etc.)

• Multistakeholder Steering Committee, led by Empresa de Energia de Bogota.

• Working groups on Human Rights, Eradication of Child Labour, Anti-Corruption, Caring for Climate

• Ms. Mónica de Greiff, CEO of Empresa de Energia de Bogota, Member of the UNGC Board

The UN Global Compact - Clarification

The Global Compact is not…• a regulatory authority• a substitute for regulation at the national or international level• a UN seal of approval or label• a PR exercise

UN Global Compact – An Integrated Sustainability Framework

Some Key Challenges in the Oil and Gas Sector

• Environmental challenges– Limits on natural resources – Emissions and climate change– Extraction practices– Land/ Water use

• Economic and social challenges– Sector dependence– Corruption– Distribution of benefits/revenue – Protecting human rights– Conflict

Platforms for Action: Environment

Caring for Climate and the CEO Water Mandate

Caring for Climate– Launched in 2007, action platform to mobilize companies to implement

climate change solutions & help shape public policy– 380 signatories in 65 countries working to: EMBED Environmental

Stewardship ; BALANCE short-term targets and long-term goals; DIFFUSE best practices throughout value chains by collaborating and engaging stakeholders; TRANSLATE best practices into processes that work in diverse geographies

CEO Water Mandate– Public-private initiative launched by the UN Secretary General in 2007 – 86 endorsers are working to: DEVELOP, IMPLEMENT and DISCLOSE

water sustainability policies and practices.– 6 elements: Direct Operations; Supply Chain and Watershed Management;

Collective Action; Public Policy; Community Engagement; and Transparency.

Anti-Corruption

The 10th Principle – Anti-Corruption

• Development and Dissemination of Resources and Tools– RESIST: a scenario-based tool for employee training on resisting extortion

and solicitation in international transactions

– E-Learning Tool: a learning platform for practical guidance on how to fight corruption through six interactive dilemma scenarios

– Fighting Corruption in the Supply Chain: A Guide for Customers and Suppliers: common supply chain corruption scenarios and a framework and set of tools for addressing them

– Reporting Guidance: to assist companies in identifying reporting priorities that can put business on the path of performance improvement and enhanced transparency

• Working Group on the 10th Principle– Over 60 members, - strategic direction and provides a platform to discuss

needs in this area and implementation challenges

Anti-Corruption in the Oil and Gas Sector: Opportunities for Engagement

• Oil & Gas Sub-Working Group– How companies in the oil and gas sector enact anti-corruption

measures.– Exploring existing compliance practices and promoting common anti-

corruption compliance standards.

• Collective Action – Anti-Corruption Project (Brazil, Nigeria, South Africa, India and Egypt):

Aims to facilitate dialogue between the private and public sector and explores how collective action can create incentives for ethical business performance.

– Work is carried out through the local networks in each of the countries and involving other stakeholders.

GUTE GRÜNDE FÜR NACHHALTIGKEITEine einfache Weisheit

Human Rights

Human Rights

• Both “Respect” and “Support”• Business and Human Rights Dilemmas Forum• Indigenous People’s Rights – Business Guide in Development• The Women’s Empowerment Principles (Over180 CEO signers)

– 7 Principles offering guidance on how to empower women in the workplace, marketplace and community

– Joint initiative of UNGC and UN Women– Elaborates the gender dimension of good corporate citizenship, the UN

Global Compact, and business' role in sustainable development• The Children's Principles

– Ten principles that call on business everywhere to respect and support children’s rights throughout their activities and business relationships

– Identifies actions that all business should take to maximize the positive impacts and minimize the negative ramifications that their activities may have on children

Business and Peace

Business and Peace

• Guidance on “Responsible Business in Conflict-Affected and High-Risk Areas”- Articulates a common understanding of what constitutes “responsible business” in a conflict-affected or high-risk area- To enhance dialogue and engagement between companies and investors- Pilot Group of Companies and Investors operationalizing the Guidance

• Joint Global Compact-PRI Working Group: - Exploring challenges, sharing best-practices stemming from operating in high-risk areas.- Many oil and gas companies but also other sectors

• Country-specific webinars (Colombia, Myanmar, Iraq etc.)

Management Model / Leadership Blueprint

• Normative Framework

• Focus: WHAT defines a leader in corporate sustainability

• Target primarily sustainability leaders and aspiring leaders

• Leaders encouraged to cover all aspects of Blueprint in their

COP

•Implementation Model / Guide

•Focus : HOW to build the right management system

•Target audience: New participants, with leadership

examples to inspire

•Six-step model useful to structure and generate content

for COP

Conclusions

• Voluntary initiatives helpful, but can’t substitute for what Governments do or should do. (self-enforcing nature/collective action problem)

• Shift from philanthropy to the creation of shared value.• Need to bring responsible business/sustainability to scale.• Transition from experimentation & capacity-building to action,

differentiation & accountability.• Further leverage drivers that motivate changes in corporate

behaviour – investors, business schools.• The UN Global Compact as a way to integrate sustainability and

make positive contributions to advancing societal goals.

Thank you

www.unglobalcompact.org