Why Corporate Sustainability
Is More Important Than Ever

In today's interconnected global economy, the long-term value and success of business are inextricably linked to the integration of environmental, social and governance issues into corporate management and operations. This defines the modern corporate sustainability movement.

The global crisis in financial markets raises a range of important and urgent questions regarding corporate sustainability generally and the UN Global Compact specifically. Among the five most relevant:

How can trust be restored in markets generally? Public trust in the private sector and "markets" has been seriously damaged. Amid this climate, many consumers and societal stakeholders may make little distinction between the "banking sector" and the corporate sector - that is, companies operating in non-financial industries.

What will this mean for voluntary initiatives and their relationship with regulation? The bailout and rescue packages announced by governments mark a historic move by the public sector in asserting more control over financial and investment markets.

Will companies still "invest" in corporate sustainability during an economic downturn? The financial crisis is clearly impacting the real economy and the prospect of a global recession is looming.

Will 25 years of global growth and rising prosperity - driven by multilateralism and open, ruled-based economies - be replaced by barriers to trade and commerce? Growing distrust in markets is fanning populist reactions to global economic integration.

Will governments re-order their priorities in ways that will place less importance on public-private partnerships? The public sector's unprecedented bailout of financial-sector institutions will put significant strain on government budgets, possibly leading to a re-ordering of priorities that could have implications in terms of public-sector investment in key sustainability and development issues.

Amid this context, it is our belief that the overriding objective and priority of all global actors and stakeholders must be: Restoring Confidence and Trust in Markets.

We believe that the UN Global Compact can play a constructive role. More specifically, we propose that: A commitment to sustainability can help the private sector and markets regain the confidence and trust of the public and other stakeholders.

The financial crisis and the subsequent economic downturn represent a significant upheaval in the evolution of markets and the private sector. Restoring this trust should therefore be viewed as the central imperative. To restore momentum towards sustainable and inclusive global integration, it is more important than ever to build market legitimacy and political support based on sound ethical frameworks such as the UN Global Compact.

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