HOW UN GLOBAL COMPACT CAN CONTRIBUTE CORPORATE ACCOUNTABILITY AND SUSTAINABILITY?

Abstract

Purpose - The United Nations Global Compact initiative is presented for businesses and nonbusiness as a universally accepted set of principles. The aim of the 10 principles in the areas of Human Rights, Labor, Environment, and Anticorruption is to encourage businesses to align their operations and strategies with committed values. The Global Compact network involves not only companies but also governments, labor, and civil society organizations. Corporations, community, and environment are integral parts of a system that correlate to each other. In light of the assumption that business operations have increasingly observable effects on the environment, economy, and social life on a global scale, it is necessary to have accountable and sustainable firms. The Global Compact is a voluntary strategic policy initiative, and it has become more important in where interactions between organizations and stakeholders to be more dynamic. On the other hand, sustainability has economic, social, and environmental dimensions, and in accordance with these dimensions, it is necessary for firms to take into account the influence of their operations on their stakeholders. Thereby, from theoretical perspectives, the primary objective of this chapter is to illustrate the role of Global Compact in corporate accountability and sustainability. Design/methodology/approach - An extensive literature research is conducted in order to understand the relationship between Global Compact principles and corporate accountability and sustainability. Findings - From a theoretical point of view, there are some conditions for the advancement of the corporate accountability and sustainability. For instance, there is need for stakeholders' insistence about incorporating social and environmental values into the business economic decisions. Thus firms could contribute to not only worlds' economic but also social as well as environmental future. Research limitations/implications - The research is a theoretical study, but for further studies, empirical studies can be conducted to understand the interactions between Global Compact principles and corporate accountability and sustainability. Practical implications - This study may be useful for managers to realize the role of Global Compact principles on corporate accountability and its contribution to being a sustainable firm. Originality/value - There is a lack of studies that analyze the role of Global Compact principles on corporate accountability and sustainability. Examining the principles in light of corporate accountability and sustainability will add a value to the literature in this area.