Business unusual: UN must push for private sector accountability

Pauliina Murphy is Engagement & Communications Director at the World Benchmarking Alliance, an independent, non-profit organisation measuring how influential companies around the world impact people and planet.

The United Nations has come a long way since 1945. What began as a mission to keep the peace is now a global effort to build a fairer, greener, more sustainable world. 
But with rising inequality, climate extremes, and geopolitical tensions, the clock is ticking on the 2030 Agenda, all the while the U.N. is under more pressure than ever to reform. 

The UN80 Initiative, a system-wide reform effort, should also be seen as an opportunity to accelerate the implementation of the Sustainable Development Goals and bring in more of the private sector’s energy, ideas, and investment, which will be just as vital as governments’ commitments in turning the U.N.’s ambitions into action.

The way in which the private sector is brought to the table must be carefully considered and done transparently and with clear accountability so that their contribution meaningfully supports our global agendas. 

Because now it doesn’t. 

Our research shows, for example, that 90% of the world’s 2,000 most influential companies are not even halfway to meeting fundamental societal expectations on human rights, decent work and ethical conduct. 

These companies account for 46% of global gross domestic product, are responsible for 54% of the world’s energy-related emissions and employ 99 million people directly. 

Their potential, reach and influence can help solve the world’s most pressing issues, but not if we don’t identify their responsibilities in contributing to our global agendas and don’t have mechanisms to hold them accountable for delivery.

In another study we did on companies and nature, we found that only 5% of the 800 companies we surveyed assessed the impact of their operations on the environment. 

That means 95% are not assessing their impact, with some of the most resource-dependent sectors, including mining and agriculture, failing to understand the effect they are having on the environment, and therefore ignoring their responsibilities. 

Pact for the future

The U.N.’s  Pact for the Future, which was introduced last year, has begun to address this point.

Member states committed to encourage the private sector to contribute to addressing global challenges and to strengthen businesses’ accountability for implementing U.N. frameworks. 

But the Pact does not detail how member states can actually ensure that businesses play their part in turning these agreements into reality.

Now, one year on and with UN80 reforms under way, we must ensure the Pact for the Future starts to deliver its intended impact. 

To do this, we need globally agreed and clearly articulated business responsibilities, laid out in well-defined frameworks and principles.

The good news is, we are not starting from zero. 

The U.N. Guiding Principles on Business and Human Rights have already established widely recognised standards that clarify businesses’ responsibility with respect to human rights, alongside the duty of states to protect them. 

Similarly, the Global Biodiversity Framework’s Target 15, agreed at the 2022 U.N. Biodiversity Conference or COP15, requires countries to ensure that large and transnational companies assess, disclose and mitigate their impacts on biodiversity. 

This year’s Fourth International Conference on Financing for Development also took an important step by articulating the actions needed to align private sector activity with sustainable development. 

This included the need to clarify business responsibilities in implementing international agreements. These are foundational shifts from asking companies to “do better” to defining what “better” actually means.

The U.N. is the only truly legitimate global forum where norms for corporate accountability can be agreed upon collectively. 

U.N. frameworks allow us to integrate business responsibility but if we fail to do so, we risk a fractured future in which only the most powerful economies will dictate business norms,  leaving most countries without a seat at the table.

It is no longer enough to invite business to the table as a partner; the expectation of responsibility must be made explicit, measurable and enforceable. 

The next major opportunity to advance the Pact for the Future is the COP30 climate talks in Brazil next month. 

It means embedding clear language on corporate accountability into formal U.N. processes, through outcome documents negotiated and adopted by member states. The political declaration for the World Social Summit, also in November, outlines a specific responsibility for business on living wages. 

Such commitments signal to businesses that accountability is not optional but integral to multilateral agreements. Through this approach, we can move from aspiration to action and hold businesses accountable to deliver on global goals.