Mendoza School of Business

Companies proudly describe their ‘Compact’ achievements at Notre Dame conference

Published: March 31, 2011 / Author: Ed Cohen

Coca-Cola is giving Haitian farmers advice on how to grow mangos for Coke’s Odwalla-brand Mango Tango smoothies.

Alcoa is bringing potable water, hospitals and schools to an Amazon rain forest community where the company plans to mine bauxite for 80 years.

Those are two examples of how signatories to the United Nations Global Compact are doing good while doing well financially. They talked about their successes at a major conference held earlier this month at the University of Notre Dame’s Mendoza College of Business.

The U.N. Millennium Development Goals, the Global Compact and the Common Good brought together scholars, government officials, company executives and U.N. representatives to discuss practical and conceptual issues involved in world poverty.

“The main purpose of the conference was to help people understand that business serves the common good on at least two levels,” said Rev. Oliver Williams, C.S.C., director of Notre Dame’s Center for Ethics and Religious Values in Business. “On the one hand, just producing goods and services – doing what business does – is a great service to the common good. We have a relatively high standard of living today because of the innovation and creativity of business operating through the markets and incentives of capitalism.”

The second level, said Williams, is for business to serve the common good by helping the many who are not even in the market because they lack  marketable skills and the resources to acquire them. This population is the primary target of the Millennium Development Goals. The U.N. effort has made a concerted effort in recent years to provide a “hand up” rather than a handout, he added.

Representatives of 11 well-known companies, including Microsoft, Nestle, Novartis, KPMG, Alcoa, Coca-Cola, Merck, Deloitte & Touche and Levi Strauss, described initiatives their firms have undertaken as part of their commitment to the Compact.

Founded in 2000 by then Secretary-General Kofi Annan, the Compact consists of 10 principles aimed at promoting human rights and labor rights, enhancing care for the environment and encouraging anticorruption measures. Initially endorsed by just a few dozen companies, its signatories now number more than 6,000 businesses and 1,400 non-government organizations in 135 countries.

Kevin McKnight, director of sustainability for the global aluminum company Alcoa, said Alcoa held off signing until 2009 on the advice of company attorneys. Company executives then realized that the agreement’s principles matched Alcoa’s operating values.

“Why do we do these things?” McKnight said of Alcoa’s activities in line with the Compact’s objectives. “Partly because it’s the right thing to do,” but that’s not the only reason, he said.  McKnight said Alcoa knows it constantly must demonstrate its commitment to being a good corporate citizen so it will be allowed to mine raw materials and fabricate aluminum all over the world.

Among several other examples, he described the company’s development goals in relation to a bauxite (aluminum ore) mine it opened two years ago in Juruti, Brazil, in the Amazon rain forest.  The company built the mine, a port on the river and a railroad to move ore from mine to port.

McKnight said Juruti is home to about 47,000 people. Most live in small communities along the river and survive on subsistence agriculture and fishing. Per-capita income is about $23 a month.

To spur economic development, he said, Alcoa formed a community council and seeded a microdevelopment fund. It built schools, a hospital and a government office, dug deepwater wells, and sponsored business-training programs.

“The biggest issue we have in this part of the world is we get there and we have an enormous amount of work to do, but there is no capacity in the region to do the work,” he said.

McKnight said Alcoa wants to turn the Juruti facility over to capable local citizens as quickly as possible because it’s too expensive to bring in people from outside the country to run it long term.

“We plan to be there for 80 years before the mining runs out,” he said.

Kelly Brooks, group director, stakeholder relations, for the Coca-Cola Company, described about a dozen of his company’s efforts in line with the Compact. These included a first-ever collaboration with Greenpeace to end the use of hydro-fluorocarbons (HFCs) in the cooling systems of Coke’s innumerable retail beverage coolers worldwide.

The company’s many sustainable agriculture projects include a partnership with the Bill and Melinda Gates Foundation and the NGO TechnoServe. The project’s goal: to double the incomes of 50,000 small fruit farmers in Uganda and Kenya. Coca-Cola is one of the world’s largest buyers of fruit for ingredients in its beverages.

A similar project in Haiti called Haiti Hope aims to teach mango growers better production methods so they can sell to Coke brands such as Odwalla fruit drinks, he said. Ten cents from every bottle sold of Odwalla Mango Tango goes to support Haiti Hope, Brooks said.

Other companies presenting at the conference included the Japanese chemical company Sumitomo, which has developed a malaria-fighting bed net. The net has insecticide incorporated into its fibers so it remains effective against the mosquito that spreads the disease for years longer than conventional nets.

About 250 million people are infected with malaria every year, and about 1 million die from the disease. Ninety-percent of the cases occur in Africa, and a majority of the fatalities occur among children younger than 5. The disease also has a devastating economic impact because it prevents adults from working and children from attending school.

Sumitomo has not only donated hundreds of thousands of the nets, but it produces many of them in Tanzania in East Africa, providing jobs to about 7,000 people. 

The Notre Dame conference was convened by the U.N. Global Compact Office, the Mendoza college’s Center for Ethics and Religious Values and the U.N. Principles for Responsible Management Education (PRME).

The conference was presented in conjunction with the Notre Dame Forum on the Global Marketplace and the Common Good, a yearlong series of speakers, presentations, discussions and other activities intended to examine the role of ethics, morals and values in the rebuilding and reshaping of the global economy.  The company presentations and reflections of more than 12 academics at the conference will be published in a forthcoming book.


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