‘Peace-ing’ together the world…

September 21, 2013

If only it were this easy.

 

The United Nations General Assembly begins its annual meeting next week with the overhang of chemical weapons diplomacy in Syria and a diplomatic dance over Iran’s nuclear aspirations (and the distrust by much of the West of Tehran’s intentions). That creates a tantalizing prospect of the two, U.S. President Barack Obama and Iranian President Hassan Rouhani, taking a face-to-face spin together on the global stage.

But it was all about getting down to business on Friday at the Grand Hyatt hotel in New York where the UN Global Compact and the LEGO Foundation unveiled a 1.65 meter tall replica of the UN headquarters. UN Secretary-General Ban Ki-moon playfully pointed out his office. He was joined by LEGO Foundation chairman Kjeld Kirk Kristiansen and its chief executive officer Dr. Randa Grob-Zakhary, who want the way children play to be re-defined and the learning process to be re-imagined.

 

 

Ban placed the final piece into the model, which took around 500 hours and more than 90,000 pieces to construct.

These are the gentlemen who built it. They think they have the coolest jobs in the world.

LEGO’s Lukas Fiman, a technical developer and Jaroslav Vasilisin, a technician talked about their jobs and the process.

 

If only the renovation of the UN’s New York campus were that easy. Ground was broken in May 2008 and just this past August the Secretariat Building renovations were completed. However renovations still have more than year to go.

And while the reconstruction moves apace in New York, the gnawing and long-standing historical issues of creating a safer world, educating and feeding the less fortunate and supplying them with clean water and health care carry on. Those are projects that never seem to have a deadline. For evidence just look at the gaps between reality and the 2015 Millennium Development Goals which aim to halve extreme poverty rates. There are eight goals in all.

Nations and NGOs are looking beyond 2015 and much of the focus remains on Africa, a diverse continent where one size does not fit all in when it comes to developing better government as well as creating sustainable and strong businesses, participants said.

The latest Eurasia Group Africa Monthly report highlights the shifting short-term political risk outlooks on the continent. Kenya, Cote d’Ivoire, and Ghana showed improvements while Nigeria and Tanzania showed declines. Gabon, Rwanda, Zambia, Senegal, Angola and Mozambique were largely neutral.

[Seated from left to right: Olusegun Mimiko, Governor of Ondo State in Nigeria; Anthony Mothae Maruping, Commissioner for Economic Affairs, Africa Union; Betty Maina, CEO, Kenya Association of Manufacturers; Elias Masilela, CEO, Public Investment Corporation, South Africa]

“For us to be able to create the jobs in Africa we must look at it, the global financial architecture that is militated against business in Africa,” said Olusegun Mimiko, the governor of Ondo State in Nigeria.

“Look at the debt burden of African countries? Are they sustainable?” Mimiko continued. “Look at barriers to export in Africa? Are we able to export ourselves out of poverty like somebody put it?  We are talking post-MDG, we are talking Global Compact. We must address these issues. Yes, some of them are business, but they are also moral issues that we must address.”

In a survey commissioned by UNGC over two-thirds, or 67 percent, of the 1,000 chief executive officers polled said more should be done to address global sustainability challenges. Corporate executives surveyed by Accenture, the management consulting firm, are not convinced enough is being done to change these conditions. In fact just 32 percent said they believed the global economy was on the right track to meet the demands of a growing population within global environmental and resource constraints.

Building up the private sector in Africa was a big focus for the UNGC this year. As Ban laid out in an speech before a working lunch in midtown Manhattan, the focus is on four key areas:  finance, economics, women’s empowerment and education.

During the luncheon, the recommendations from the table discussions settled on four goals, according to a press release from the UNGC:

1)      Successful investing means betting long term, betting green, and investing right, for inclusive growth, jobs and poverty reduction. The psyche of investors needs to adopt long-term thinking.

 

2)      Education is necessary to create entrepreneurs. Teaching the teachers is important.

 

3)      To unlock jobs and growth, stimulate and support creativity in small- and medium-sized firms (SMEs).

 

4)      Bring women entrepreneurs and farmers into the agricultural supply chain. Give women the title to their land.

“Africa wishes to set its own agenda, set its own priorities,” Dr. Anthony Mothae Maruping, Commissioner Economic Affairs of the African Union, told reporters.  “Africa has re-branded itself in terms of production, trade and services. The express vision of African leadership is a prosperous continent with a human setting that is integrated, peaceful, competitive and doing what is necessary for sustainability.”

There are 8,000 companies around the world who voluntarily align their operations and strategies with ten universally accepted principles in the areas of human rights, labor, environment and anti-corruption, and to take action in support of U.N. goals and issues. Is that re-defining and re-imagining or simply common sense?

The UNGC attempted to show that not only by acting responsibly will companies do well, but stock investors can do well too.

Ahead of their meeting on Friday, they launched a non-investable stock index of companies that not only abide by the ten principals of the UNGC but also show at least “a nickel of profitability as the minimum criteria on profitability over three years,” Gavin Power, UNGC’s deputy director, told Reuters in a phone interview.

UNGC linked up with Sustainalytics, a financial research and analysis firm that tries to identify socially responsible businesses.  According to Power, out of the 8,000 companies that participate in the program, about 1,000 are listed on a stock exchange. Sustainalytics has data on a little over 700 of them and screened them for how well they perform while adhering to the 10 principles of the UNGC.

“Whereas many of the existing SRI’s (Socially Responsible Index) out there show market underperformance historically,” Power said, “one could argue that one of the reasons for this is that they are looking at environmental and social performance in isolation and they are not including any metric around the firm’s financial fitness. And so that is why we combined those two elements – environmental and social sustainability, i.e. global compact principal performance – and just a basic measure of profitability.”

UNGC 100 Stock Index – Constituents (as of Sept. 2013)

The GC100 stock index was created. The UNGC said the index, which is reviewed every September, outperformed the FTSE All World stock index, rising 26.4 percent versus 22.1 percent over a one year period. In the past two years the GC 100 rose 19 percent versus 17.7 percent for the FTSE All World index.

UNGC disclaimer: the GC 100 was in no way produced, endorsed or supported by FTSE or its licensors.

“We are not suggesting a causal relationship,” Power said. He disagreed with the idea that by having the criteria of minimal profitability included in the mix the GC 100 index was inherently biased.

“Cherry picking, I don’t quite agree with that,” said Power.  “This is not an investible index at this point. It is more an academic exercise and something to be discussed in the coming weeks and months.”

(Photos and video by Daniel Bases)

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