In this era of globalization, corporations have a new paradigm to follow: They must maximize profits while ensuring company growth in addition to the sustainability of society of the community and its environment, a special adviser for the United Nations said at Fordham University on Feb. 11.
Manuel Escudero, Ph.D.
Photo by Gina Vergel
“Companies are learning now that although this paradigm may have been a moral answer for [corporate]legitimacy, now it’s becoming material. It’s becoming a source of value,” said Manuel Escudero, Ph.D., head of academic initiatives at the United Nations Global Compact Office.
Escudero, on the Rose Hill campus for the College of Business Administration’s (CBA) celebration of International Business Week, discussed the “Sustainability Frontier and the United Nations Global Impact.”
Launched in July 2000, the UN Global Compact is a strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labor, environment and anti-corruption.
In the year of its launch, 43 companies signed on to the voluntary initiative. Today, more than 7,500 vow to follow the global compact.
“For global companies like Shell, Nestle and Merck and so many others, going the way of sustainability is not only appropriate in keeping up the image of the company, it adds value,” Escudero said. “They are starting to find new business models and produce new materials. It’s amazing.”
The Global Compact cannot take full credit for this paradigm shift, Escudero said. It is the world’s citizens that sparked a change.
“The IT revolution has made citizens much more reflective than ever before,” Escudero said. “We can connect through social networks with millions of people around the world. We can know what is happening anywhere in real time. That has changed our consciousness.”
And if a corporation practices compliant labor legislation in the United States but then goes to another country like El Salvador and operates a sweatshop, people will know that.
“At the end of the day they’ll get a boycott in the United States because of what they are doing in El Salvador,” Escudero said. “Companies are not opaque anymore. They are absolutely transparent. That’s why the global compact is growing and growing.
“This is not a question of making companies goodie goodies, my friends,” he added. “Companies are facing a huge crisis of legitimacy. You can be legal, but if you’re not legitimate, that jeopardizes your role as a company.”
Meng Liu, a specialist on China, and Olajobi Makinwa, a specialist on Africa, followed Escudero’s speech with discussions on how participant companies in that country and continent, respectively, are honoring the U.N. Global Compact.
International Business Week was held on the Rose Hill campus from Feb. 8 to Feb. 12.
The series of events included a discussion on the Pope’s encyclical on economics, a breakfast with an attorney specializing in international business and a lunch tutorial on global etiquette.
International Business Week was organized by CBA’s Global Learning Opportunities and Business Experiences (GLOBE) program, the CBA Dean’s Office and the American Catholic Studies department.