Corporate Thematic Areas
UNDP in Montenegro
UNDP Europe & CIS
Nineteen Institutions, Companies and NGOs from Montenegro Join the UN Global Compact
Budva, 9 December 2010
“The response of the Government and Montenegrin companies to the floods throughout the country is the best indicator that society is now ready to adopt the global economy trend of Corporate Social Responsibility,” – Vujica Lazović, Vice President of the Government of Montenegro said at the media conference on the occasion of launching the United Nations Global Compact in Montenegro. The conference was organized by the Union of Employers of Montenegro and UNDP Montenegro, in cooperation with the Directorate for Development of Small and Medium Enterprises and the Centre for Development of Non-governmental Organizations. The Global initiative was started by the United Nations as a political platform and a strategic framework for companies dedicated to the principles of sustainability and corporate social responsibility. Global Compact means aligning business operations with ten universally accepted principles related to human rights, labour, environmental protection and the fight against corruption. Participants at the conference were eminent experts in the domains related to the Global Compact principles, as well as representatives of national institutions, non-governmental organizations and international organizations.
On this occasion, the Global Compact Charter was signed by the representatives of 19 Montenegrin companies, institutions and non-governmental organizations (NGOs), among which are: Union of Employers of Montenegro, Directorate for Development of Small and Medium Enterprises, Faculty of Philosophy of the University of Montenegro – Institute for Sociology and Psychology, Association of Business Women of Montenegro, Centre for Development of Non-governmental Organizations (CRNVO), NGO Green Home, T-Com Montenegro, Telenor Montenegro, Montenegro Stars Hotel Group, Coal Mine Pljevlja, Jadranski Sajam, Sigurnost company, Goranović Meat Industry, Department Store Nikšićanka, Spin Off company, ŠIK Lim, Elko Tim, UNEL and Eko Meduza company. More institutions, companies and NGOs are expected to follow the example in the time to come and accede to the Global Compact.
In his opening speech, Mr. Vujica Lazović, Vice President of the Government of Montenegro said: “In Montenegro, Corporate Social Responsibility (CSR) has until recently been an unknown term, but in some forms it was already accepted as a segment of business actions. Now the right moment has come to present and embrace this concept in our country. Considering the fact that we already have many examples of good practices of CSR, I conclude that Montenegro is ready to accept global trends of the modern economy.” He further pointed out the importance of cooperation between key stakeholders in the country, saying: “Let me, consequently, use this opportunity to encourage cooperation of the three key sectors in Montenegro: the Government, the civil and the business sector. Coordination of key sectors makes a perfect combination of funds (business), legal protection and capacity (Government) and logistics and commitment (civil society). This cooperation guarantees the success of every project and it is of common interest for all parties involved. CSR makes an ideal context for intersectional cooperation and development actions for the benefit of the civil society”.
Mr. Alexander Avanessov, UNDP Resident Representative/UN Resident Coordinator to Montenegro stated: “It is no coincidence that the Global Compact launch is taking place almost a decade after UNDP started its work in Montenegro- today there exist a critical mass of resources and enthusiasm among the private sector in Montenegro to streamline public interest in its business model and through concrete initiative contribute to the sustainable and equitable development in Montenegro”. He also said that it was not a coincidence that the Global Compact was launched immediately after the inauguration of the 20th edition of the Global Human Development Report entitled “The Real Wealth of Nations: Pathways to Human Development”. The main premise of the concept which was considered quite radical 20 years ago, was elegantly simple: National development should not be measured simply by national income, as had long been the practice, but also by life expectancy and literacy, Mr. Avanessov pointed out. “UN and UNDP’s work on CSR focuses on (i) policy dialogue with private sector around development priorities; and (ii) partnership on concrete projects in support of development priorities. Within this context and through commitment to the principles of Global Compact, UNDP will continue to seek out and develop innovative mechanisms for assisting the private sector to integrate public interest in their business model and address major developmental challenges in a joint manner with the private sector. UNDP will continue to broker private public partnerships with the purpose of achieving sustainable and equitable development and an environment where Montenegrins can live healthier, longer and more productive lives,” Mr. Avanessov concluded.
Mr. Predrag Mitrović, President of the Union of Employers of Montenegro said: “I am proud of companies which are already implementing responsible business models, and which have already demonstrated readiness to confirm their dedication through the signing of the Global Compact. Companies dedicated to CSR may contribute to the resolution of the biggest problems in a community. Our country may be used as a true example of responsibility, whether it comes to large Montenegrin companies or small firms.” He also said that in the time of floods, we all witnessed that companies gave their contribution through financial resources as well as through communications and advocacy. “Companies will look better to their potential buyers and clients, as well as to the investors and the media. Their employees, management and owners will feel better, and it is a common belief that a company with good reputation is more likely to stay longer on the market,” Mitrović concluded.
Mr. Zoran Vukčević, Director of the Directorate for Development of Small and Medium Enterprises said: “I believe the Global Compact will contribute to the strengthening of public responsibility and transparency, as well as to strengthening of dedication and interest of the Montenegrin companies, syndicates and civil society. Above all, it will contribute to the enhancement of mutual understanding between the companies on one side and the entire social community on the other side.”
Ms. Ana Novaković, Executive Director of the Centre for Development of Non-governmental Organizations said: “Launching of the Global Compact in Montenegro, in our opinion, was pending for the right and mature moment. This did not happen a few years back because representatives of the private sector were not familiar with the concept. We believe they now are, and that all three sectors are now heading for a very serious work.”
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Human Development (of the country and of the individual) is more than just economic growth:
Research underpinning Human Development Reports shows no consistent correlation between national economic performance and achievement in areas such as health and education. In other words, while economic growth is very important, what matters more is using national income to give all people a chance at a healthier, more productive and longer life.
On November 4th, UNDP launched this year’s global HDR, which examined progress in health, education and income since 1970 in 135 countries*.
The Report finds that even though people today live healthier, wealthier, longer lives and have better education than before, the inequalities among and within countries, and deep disparities between men and women on a wide range of developmental indicators continue to plague human development globally.
Relevant for this region, the report on one hand finds that the Eastern European countries made major gains in the previous period, but the gender inequality index still reveals that the women remain underrepresented in a number of fields, including business and politics.
It is indisputable that private sector is one of major agents of socio economic development of every country and their Human Development through job creation, investments and innovations.
Private sector plays a significant role in utilizing its resources toward a dual objective - of increasing profits and contributing to the human development and growth of communities where it operates.
In 1999, the UN Secretary General launched Global Compact as a framework for the business community to contribute to MDGs, is the world’s largest CSR initiative with over 5,500 partners in 43 countries supporting 10 principles in 4 areas (environment, labor, anti corruption, human rights). The logic is clear-
Corporate Social Responsibility is good for bottom line and social change:
One publication describes CSR as a generosity, when a corporation applies its core competencies to advance social change in a way that contributes to business results and gives it a competitive advantage**.
In researching 4000 companies globally in accordance with 400 variables ranging from financial constrain to training for disasters, Governance Metrics finds that ‘good governance translates into trust and trust determines what you’re willing to pay for company’s share***.
High performance and high integrity are good for the bottom line****. This latest research on CSR identifies correlation between CSR activities and organization performance measured by variables such as shareholder returns, profit or marketing impact.
Global Compact and CSR is a two way street, of course. As Michael Bloomberg - a well known businessmen and currently major of New York - said recently during the meeting with the Secretary General: Respect of Human Rights and sustainable development, promotion of energy efficiency earns the consumer respect and support that no marketing or advertising can buy.”
Chevron in Indonesia supported development of a ‘alert village’ model that provides access to health care for women and children in rural areas- the model was institutionalized within the Indonesia Ministry of Health after two years and Chevron, in addition to providing better working conditions for its staff, contributed to a sweeping social change in the country through reducing mortality of pregnant women and children at birth.
Corporate Social Responsibility is good for bottom line and the community
Companies committed to CSR can contribute to addressing major community’s concern. A good example is Mobitel d.o.o. in Slovenia – due to a declining trend in the European salt market, a production facility in Sečovlje, Slovenia (a part of a National Park) almost closed operations in late 1990s. But…
In 2003, a telecommunication company Mobitel d.o.o. bought the salt production enterprise in order to safeguard natural and cultural heritage and to maintain a traditional salt making process.
This innovative business relationship resulted in a win-win-win situation:
(i) initial investments in the reconstruction of salt making and National Park infrastructure resulted in preservation of natural/cultural heritage and direct economic benefit to the company,
(ii) public image of telecommunication company skyrocketed resulting in new subscription and customers who appreciated investment in nature and culture protection, and
(iii) the country earned a new partner who was essential in maintaining the unique comparative advantage of the National Park*****.
Companies committed to CSR can contribute to achievement of strategic national development priorities.
With recent floods, we have seen private sector contribute both through financial means and through advocacy and communication.
Montenegro can showcase examples of socially responsible companies- whether it is a Montenegrin large size company (i.e. Telenor investment in renewable energies/solar in order to power its base stations) or a small firm (EcoWash enterprise that provides car wash service without water thereby saving 150-200 liters of water per carwash).
The UN Secretary General addressing the business community during the MDG summit, said:
“I urge governments to create an environment in which business can flourish. That means supporting and rewarding responsible business practices. It means putting in place appropriate regulation. It means breaking down barriers to trade and reducing bureaucratic hurdles. And it means good governance.
I urge business to embrace the Development Compact, to advocate for the United Nations and its objectives, and to recognize that an investment in the MDGs is an investment in growth, prosperity and the markets of the future, a win-win proposition.”
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Regional UNDP Report: ”Business Solutions to Poverty – How inclusive business models create opportunities for all in Emerging Europe and Central Asia“
More and more companies around the globe are recognizing that people with low incomes are potential markets and opportunities. Taking into account that few examples have been available from the region of Europe and Central Asia (ECA) until now, UNDP researchers – covering every country of the ECA region – captured examples of successful inclusive business models. Agriculture, financial services, information and communications technologies, tourism and waste management are some of the featured sectors that are presented in the Regional UNDP Report under the title ”Business Solutions to Poverty – How inclusive business models create opportunities for all in Emerging Europe and Central Asia“. This Report features for the first time case studies from 19 countries in the region, and provides practical recommendations for how to develop inclusive business models. Launching of the Report is expected in the first half of the next year.
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Rezime – Regionalni izvještaj UNDP: “Poslovna rješenja za smanjenje siromaštva – kako modeli poslovanja koji uključuju i socijalno isključene grupacije stvaraju mogućnosti za sve na novim tržištima u Evropi i Centralnoj Aziji”
****‘Corporate Social Responsibility: Different Fabrics’, Robert L. Heath and Lan Ni, University of Houston Essential Knowledge Project, 2010