(New York, 25 February 2011)– After a four-month test phase, the UN Global Compact Office has officially launched the Differentiation Programme – a practical framework to help all business participants improve sustainability performance and disclosure practices.
Starting today, the Global Compact Office incorporates a framework for companies to differentiate themselves based on the extent to which their Communications on Progress (COP) describe their levels of implementation of the ten Global Compact principles and related areas. Upon submitting their next COPs, companies will be categorized as “GC Active” or can self-declare themselves “GC Advanced” based on their disclosure on progress made in implementing the ten principles and contributing to broader UN goals.
The differentiation categories will become publicly available on the Global Compact website, starting in March.
Companies whose COPs do not meet the minimum requirements to achieve GC Active status will be given an eight-month period to meet the minimum requirements. During this time, these companies will have access to a Learners Platform, a programme designed to help companies achieve the level of disclosure and transparency expected for the GC Active level.
The Differentiation Programme represents a new phase in the Global Compact transparency and disclosure policy, designed not only to improve transparency among smaller and less experienced participants, but also to stimulate continuous progress and performance improvement among the more advanced companies. The Programme is designed to provide incentives and recognition (based on self-assessment) for businesses at all levels to make meaningful progress towards a comprehensive implementation of the principles in governance, strategy and operations.
“This represents a new phase in the Global Compact’s transparency and disclosure policy”, said Jerome Lavigne-Delville, Head of Communication on Progress for the Global Compact. “As one of the main outcomes, differentiation at the GC Advanced level will be critical to a range of stakeholders – including investors — in the assessment of companies’ progress, using the COP as a platform to benchmark management systems against global best practices”.
The Communication on Progress policy retains its sanction provision – that is, companies that fail to disclose progress are ultimately expelled from the initiative. Thus far, over 2000 companies have been expelled from the Global Compact for failure to communicate.
The Differentiation Programme has been refined based on feedback received during a test phase and a review process that started in October last year. During that time, the Global Compact Office considered participant experiences and consulted with all relevant stakeholders, including a number of Global Compact Local Networks, the financial community, and companies.
Head, Communication on Progress
UN Global Compact
UN Global Compact