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Tobacco companies face exclusion from UN Global Compact under new proposals

United Nations’ corporate sustainability body tightens rules

Tobacco companies – including potentially industry giant Philip Morris International – face exclusion from the UN Global Compact under proposals that are being considered by the United Nations’ corporate sustainability body.

Whilst discouraged, tobacco companies can currently join the Global Compact – with Marlboro-maker Philip Morris being the most recent to join in 2015. The tobacco exclusion – if approved – would mean that any company deriving revenue from the production or manufacture of tobacco would now be excluded. Philip Morris has not commented to RI.

The recommendations also call for the inclusion of nuclear, biological and chemical-based weapons manufacturers under the UN initiative’s weapons-based ban.

Currently, only companies manufacturing and producing landmines and cluster bombs are prohibited from joining the Global Compact. Broadening the exclusion on weapons is an attempt by the body to bring its framework in line with current UN conventions and treaties.

Presented at the most recent board meeting of the Global Compact on July 19, the recommendations are the result of a review of the Global Compact’s Integrity Measures, which aim to protect the integrity of the initiative.

In total eight recommendations have been proposed to enhance the UN body’s “policies and procedures to better safeguard the brand and reputation of the UN and to ensure the promotion and recognition of responsible business”.

The three areas covered by the recommendations are: entry of new participants, engagement with existing participants, and exit/re-entry of participants that do not uphold the initiative’s integrity measures.

Speaking to RI, Gavin Power, Deputy Director at UN Global Compact, said that it is “likely” that the recommendation on tobacco will be approved by the Office of the UN Secretary General within the next couple of weeks.

He also said that “clarity” on the remaining seven recommendations, which received the “strong” support of the Board, is also expected within the same time-frame.If approved by the Secretary General’s office, the final decision on the recommendations will be taken by Global Compact’s executive team .

Power told RI that the enhanced exclusion criteria would mean that 11 companies in total (eight in relation to tobacco and three in relation to weapons) would be “asked to depart the initiative”.

Power added that “whilst the number of companies is relatively small, what’s important here is the principle”.

Positioning the integrity review under the umbrella of the Global Compact’s wider three-year 2020 Strategy, initiated by Executive Director Lise Kingo, Power referred to the recommendations as a “very exciting stage in the Global Compact evolution” and as potentially ushering in “Global Compact 3.0” – with the second version relating to the introduction of de-listing in 2006.

He explained: “The initiative remains one that is fundamentally about engagement, improving corporate behavior; we want to engage with as many industries as possible, it is not an exclusionary initiative.

“But there are certain industries – landmines and cluster munitions – and now, potentially, chemical, biological, and nuclear weapons and tobacco – pending discussions – that we feel are not consistent, due to the products or services they are producing, with the ultimate aims of the initiative”.

Power also said that the introduction of third party verification for reports submitted by members has been discussed as a part of the review, and that such a requirement could potentially be added to the list of recommendations in the future.

Members of the UN Global Compact are obligated to provide an annual Communication on Progress (COP) report, which chart the corporate’s progress against the principles of the UNGC and forms the basis of any delisting of a company.

In addition to the Integrity Measures Review, the UNGC has also been conducting a Governance Review, the recommendations of which are still under consultation. The meeting report notes that the UNGC aims to deliver the final recommendations “for the Secretary-General’s review by year’s end”.