Ten principles on human rights, labour, environment, and anti-corruption

Overview

The UN Global Compact (UNGC) is the world's largest corporate sustainability initiative with over 21,000 participating companies across 160+ countries. Companies join voluntarily and commit to aligning their operations and strategies with ten principles derived from the Universal Declaration of Human Rights, ILO Core Conventions, Rio Declaration, and UN Convention Against Corruption. Participation requires an annual Communication on Progress (COP).

Key Requirements

The ten principles

The UNGC's ten principles are grouped across four categories. Human rights (Principles 1–2) require companies to support human rights and avoid complicity in abuses. Labour (Principles 3–6) are based on ILO fundamental conventions — freedom of association, no forced labour, no child labour, and non-discrimination. Environment (Principles 7–9) require precautionary approaches, environmental responsibility, and adoption of clean technologies. Anti-Corruption (Principle 10) requires companies to work against corruption in all forms.

Communication on Progress

Every UNGC participant must publish an annual COP within 12 months of joining and every year thereafter. The COP must describe actions taken to implement the ten principles and requires the CEO to sign a statement of commitment. Failure to submit a COP within two years results in 'non-communicating' status; continued failure results in expulsion from the UNGC and public listing as a non-communicating company.

UNGC and SFDR

SFDR requires Article 8 and 9 funds to disclose the proportion of portfolio companies that are involved in violations of UNGC principles (PAI 13) and the proportion without UNGC-aligned compliance processes (PAI 14). This makes UNGC membership and clean COP status a direct financial signal for institutional investors — companies in violation of UNGC norms are a mandatory adverse impact disclosure item for regulated European funds.

Common Misconceptions