UN Global Compact Launches SDG 16 Business Framework to Inspire Transformational Governance
The UN Global Compact today launched a new tool to accelerate business action on the governance element (“G”) in environmental, social, governance (“ESG”).
The “SDG 16 Business Framework: Inspiring Transformational Governance” provides companies with guidance on strengthening business culture, ethics and performance and supporting public institutions, laws and systems. It will be discussed during the UN Global Compact Leaders Summit on 16th June 2021 during the session “The Road to Transformational Governance” at 05:15 ET. Goal 16 of the Sustainable Development Goals includes 12 specific targets that promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions.
The SDG 16 Business Framework will help companies embrace transformational governance, a principles-based philosophy that calls on business to be more accountable, ethical, inclusive and transparent as a driver to responsible business conduct, enhanced ESG performance and strengthened public institutions, laws and systems.
With the increasing overlap and urgency on ESG issues, transformational governance is a prism through which businesses can expand their understanding of the “G” in ESG. It demonstrates why and how businesses can assess and implement each target of SDG 16 through internal and external activities, including throughout their supply chains.
“The COVID-19 pandemic and converging crises - including climate change, economic uncertainty, social inequality and disinformation - have shown that businesses do not operate independently of wider society. Businesses can and must play their part in promoting ethical leadership and building trust between public and private institutions and civil society. This Framework guides companies on the journey to transformational governance, moving beyond compliance to become advocates for the principles of peace, justice and strong institutions,” said Sanda Ojiambo, CEO & Executive Director of the UN Global Compact.
The SDG 16 Business Framework does not aim to create new legal commitments or standards but to deepen understanding of the role that business can play in advancing these issues; strengthen cross-functional engagement; encourage companies to assess where they are and to identify opportunities for improvements; and to incorporate into board and management oversight, values and culture, strategies, policies, operations and relationships.
It builds on insights from more than 60 business leaders and consultations in 14 countries around the world and reflects the Statement from Business Leaders for Renewed Global Cooperation that was signed by more than 1,300 Chief Executive Officers from companies in over 100 countries and delivered to the United Nations Secretary-General on the 75th anniversary of the UN. The Statement demonstrated support for inclusive multilateralism and the objectives of SDG 16. The Framework will form the basis of the UN Global Compact's focus on Transformational Governance as part of its 2023 Strategy.