Investors send reminder to lax Global Compact participants

A coalition of investors worth over US$3 trillion has today launched an initiative to help police the corporate responsibility reporting of companies as diverse as Air France, GAP Inc and LVMH (Louis Vuitton Moët Hennessy).

The 38 members of the international investor coalition have written to the CEOs of 130 major listed companies, all of them participants in the UN Global Compact. By joining the UN Global Compact, companies commit to producing an annual corporate responsibility report known as a Communication on Progress (COP).

Twenty-five of the companies have been praised by the investors for producing notably high-quality COPs, including Air France and Starbucks, while over 100 companies were identified as laggards by the investors for failing to submit a COP this year. Those companies that failed to produce COPs include GAP Inc, Severn Trent plc and LVMH.

The investors are all signatories to the UN-backed Principles for Responsible Investment (PRI) and include funds such as Aviva Investors, CalPERS and the New Zealand Superannuation Fund. The total assets under management of all signatories to the PRI are estimated at around US$18 trillion (according to pre-crisis estimates).

This new initiative builds on a shareholder engagement last year that identified which UN Global Compact participants were leaders or laggards in their reporting of corporate environmental, social and governance (ESG) performance.

Last year's initiative resulted in over 32% of the companies identified as laggards subsequently submitting a Communication on Progress and improving their engagement with the UN Global Compact. The status of all the companies from last year's engagement can be found here.

Source: UN PRI (12/9/2009) / © Photo by Jon.