Stock exchanges to promote UN goals for business

Stock exchanges to promote UN goals for business
23 Jun 2004
By Irwin Arieff

UNITED NATIONS, June 23 (Reuters) - Ten stock exchanges from around the world will announce plans on Thursday to promote U.N.-backed environmental and labor standards among the 3,000 companies whose shares they list, U.N. officials said.

The initiative is part of a U.N. effort to expand the reach of the Global Compact, a four-year-old program that aims to help businesses become better corporate citizens.

U.N. Secretary-General Kofi Annan wants Thursday's Global Compact Leaders Summit to sharpen the focus of the program, which has grown since its birth to more than 1,400 firms in over 50 countries, making it the world's largest voluntary corporate citizenship network.

Hundreds of government, business and civic leaders involved in the compact are expected to attend the summit.

The 10 stock exchanges will announce plans to send the Global Compact's guiding principles to all their listed companies, with a total market capitalization of $3 trillion, the officials said.

The participating markets are Brazil's Bovespa, a grouping of European stock exchanges known as Euronext , and the German, Istanbul, Italian, Jakarta, Johannesburg, Luxembourg and Toronto stock exchanges, the officials said.

In addition, Bovespa and the Jakarta market are to become the first two stock exchanges to join the compact, they said.

Compact participants also plan to adopt a new guiding principle that "business should work against corruption in all its forms, including extortion and bribery."

Until now, the compact has had nine guiding principles in the fields of labor standards, civil rights, and environmental stewardship. Among them are developing environmentally friendly technologies and ending sweatshop conditions, child labor and discrimination against minorities and women.

"Adoption of the 10th principle commits compact participants not only to avoid bribery, extortion and other forms of graft but also to take action to prevent their occurrence," the program said in a statement.

Among those attending the conference will be Brazilian President Luiz Inacio Lula da Silva and about 150 corporate chief executives from around the globe.

Annan first proposed forming the Global Compact in 1999 as a way to encourage corporations to commit to key principles embodied in U.N. treaties or risk a backlash from poor nations left out of the benefits of globalization.

Participating firms have been asked to post their techniques for dealing with labor, human rights and environmental challenges spawned by globalization on the program's Web site (www.unglobalcompact.org/Portal/).

Most members are from Europe and just 8 percent come from North America, reflecting U.S. firms' concerns that the compact's labor rights provisions could lead to lawsuits, compact officials said.

But membership is growing in the developing world, reflecting poor nations' desire to become more competitive in an increasingly global economy, they said.

Some labor, environmental and human rights groups criticize the compact, however, for not imposing binding standards or ensuring that participants live up to the guiding principles and the commitments they make on the program's Web site.