|Changing the charters of TNCs from their legal requirement to maximize shareholders’ returns on their investments to reflect the interests of all stakeholders: employees, suppliers, consumers, host-communities, society at large, governments and the environment. Many TNCs are chartered in nations, principalities or provincial-level states (as in the USA) that compete to offer TNCs the most lax charters with the fewest requirements for auditing, transparency and even protection of shareholders. A global Multilateral Agreement on Investors and Corporate Responsibility (MAICR) for such chartering and protocols is needed, rooted in international law to circumscribe the powers of global TNCs. Meanwhile, there are opportunities for any state to offer “best practices” corporate charters with enhanced public accountability to any corporation wishing to position itself as a superior global corporate citizen to enhance its global brand. Costa Rica, for example, a benchmark country of “best practices,” could enhance its image further by offering such superior corporate chartering to attract socially-responsible investors and corporations.|
|International accounting standards must be expanded along the lines of the Global Reporting Initiative (GRI) which promotes “triple bottom line” accounting and corporate annual reports: (i.e., economic, social and environmental accounting). Progress is being made by the movements of socially-responsible investors, which in the USA alone hold $2.1 trillion of the shares of companies that “pass” such triple-bottom line accounting. These movements, now in many OECD countries, are linked with consumers, labor unions, environmentalists, anti-corporate whistle-blowers and indigenous peoples. These links are in order to verify their social research and thereby avoid investing in companies that manufacture weapons, mistreat their employees, destroy the environment or exploit indigenous peoples and their resources. Calvert’s CALVIN Index covers 600 socially responsible companies and drives the Vanguard Calvert Index Fund.|
|Positive “screening” favors solar and renewable energy companies, those in recycling, zero emission technologies, re-manufacturing, fuel cells, etc. Such efforts are changing the way many TNCs do business. Pressure from such investors, many of whom are politically active in such broader coalitions is felt at company annual meetings and can hurt their precious global brands. The global networks of anti-corporate activists since Seattle in 1999 are getting their often-sensible reform agendas past commercial media gatekeepers. For example, sensible opposition to the patenting of life forms is leading to a reexamination of Trade Related Intellectual Property (TRIPs) under the WTO. Instead of patents and copyrights on mere discoveries (which are not inventions), NGOs advocate “copyleft” laws borrowed from the computer “Open Source” movement – which specifies such discoveries of life forms as remaining in the public domain.|
|The United Nations Global Compact launched by Kofi Annan in 1999 at the World Economic Forum in Davos invites TNCs to engage with its 9 principles of good corporate citizenship in human rights, labor standards and environmental protection, but is voluntary and lacks compliance or performance criteria. Initial criticism by anti-corporate NGOs coalesced in the “Campaign for a Corporate-free UN,” rightly fearful that the U.N. might lose credibility. However, the UN Global Compact signatory companies are receiving additional scrutiny by NGOs and importantly by socially-responsible asset management firms, notably the US-based Calvert Group, which is donating its social and environmental auditing expertise to the UN Global Compact.|
|Thus all voluntary codes of conduct, principles promulgated by TNCs, the UN Global Compact and various industry trade associations do serve the useful purpose of making companies legally liable for breaches of their vows of such “corporate citizenship.” However labor unions rightly hold that “corporate citizenship” is more of a public relations slogan than a legal reality – unions prefer to promote “corporate accountability.”|
|Mass media play a distinct role in current promotion of TNC agendas, commercial market ideologies, and unsustainable over-consumption. Today we live in “mediocracies” rather than democracies. A handful of white male Northern media barons dominate global television, movies, radio, newspapers, book publishing, videogames and increasingly the Internet. These media TNCs serve the global marketplace. So far, they resist any notion of social responsibility for advertising, over-consumption, violent, degrading content or their “monoculture” domination of cultural and lifestyle diversity. These irresponsible corporations take refuge from critics behind principles of freedom of the press. This is why it is now imperative to finance public-access, non-commercial, media at all levels from global to local. Such public goods should receive high priority in funding, whether from tax revenues, currency exchange fees, taxes on advertising or stricter auctions of licenses to use public airwaves in the global electro-magnetic spectrum. One proposal, the Truth In Advertising Assurance Set-Aside (TIAASA) discussed in the UNDP Human Development Report, 1998, would set aside a percentage of current subsidies to US advertising to fund “counter-ads” by civic groups to keep companies’ ads honest.|
| National governments can play a vital part in cooperatively creating these global governance mechanisms to circumscribe TNCs and global financial markets. Most of the international taxes and innovative funding to be discussed at the US Summit on Financing for Development will be collected by national governments. These revenues can offset capital flight, tax evasion, bolster nations’ currency-stabilization funds, as well as funding ODA and selective international agencies for humanitarian purposes or development. National governments must reclaim public trust of their citizens. First, they must clean up electoral and political corruption and enhance their own transparency and democratic processes – rather than continue in their unholy alliance with TNCs. Advanced public-interest polling methods can locate consensus on policy proposals – by going over the heads of lobbyists and insiders. Results of such random sampling of all adults – rapidly released to mass media can short-circuit special interests (A.F. Kay, Locating Consensus for Democracy: A 10-year US Experiment, 1998).National governments must also reverse all their perverse subsidies to unsustainable corporations and sectors, estimated at some $800 billion-$1 trillion annually worldwide. Removing such subsidies would save more than the $650 million annually estimated in Agenda 21 as the cost to shift societies toward sustainability. These subsidies can be shifted to renewable energy, clean, organic agriculture, public transport, environmental enhancement, and protection of livelihoods, local enterprises and biodiversity. National tax codes must be shifted to waste, pollution, planned obsolescence and virgin resource extraction – to jumpstart recycling, re-use, re-manufacturing and barter sectors. Revenue-neutrality requires a concomitant reduction in taxes on incomes and payrolls. Nations will need to implement their Agenda 21 commitments to overhaul their national accounts, GNP/GDP to fully account for unpaid work, the value of human and social capital as well as environmental resources – while deducting social and environmental costs. There are many models of such broader national accounts, including those based on Herman Daly’s Index of Sustainable Economic Welfare (ISEW). Beyond national accounting lie many non-monetary values, culture, human rights, biodiversity (the replacement costs of which are incalculable by economic methods) and cultural diversity. These require using multi-disciplinary systems approaches such as the Calvert-Henderson Quality of Life Indicators (www.calvert-henderson.com) with its various appropriate metrics, rather than exclusively monetary and macroeconomic measures. Global finance and TNC-dominated markets are operated on the logic of global competition and self-maximizing behavior of all actors – now including nation-states. Thus, we live in a regime tending toward global economic warfare. Cooperation must balance competition in all natural and living systems if social and ecological sustainability is to be achieved. Human societies and their economies are living systems and their various use of market mechanisms derive from their diverse “cultural DNA codes (i.e., their goals, values and cultures). The competitive Westphalian nation state system also must now be transformed through the strengthening of cooperative global governance structures and the pooling of national sovereignty for the new era of global interdependence, which globalization has accelerated. The events and aftermath of September 11, 2001 illustrate the need to go beyond traditional military approaches and irrelevant projects such as the US missile defense promoted by high-tech military contractors – all of which are inappropriate to address global terrorism. Thus global peacekeeping is the most urgent requirement for sustainable human development. Taxing arms trading and reducing national military budgets (mostly in the USA) is vital, as is shifting weapons budgets to diplomacy and increased funding for the UN. Military approaches can be replaced by insurance, as for example, in the proposal for a United Nations Security Insurance Agency (UNSIA) a public-private, civic partnership between a reformed UN Security Council, the insurance industry and the hundreds of civic humanitarian organizations in conflict-resolution and peace-building. Any nation wanting to cut its military budget could apply to UNSIA for a peace-keeping “insurance policy.” The insurance industry would supply the political risk assessors and write the policies. The “premiums” would be pooled to fund properly trained peace-keepers and rapid-deployment of the existing networks of civic and humanitarian groups. The UNSIA proposal is backed by several Nobel Peace Prize winners and is taught in many university courses. (See The UN: Policy and Financing Alternatives, futures, Elsevier Scientific, UK, March, 1995) Redeploying military budgets and providing alternative security structures are the sina qua non and bedrock of sustainable development. Today it is necessary to address all these issues of restructuring global financial systems if we are to identify the innovative funding required for global public goods and sustainable human development.
Hazel Henderson, a native of Bristol, UK, is a global futurist, evolutionary economist and author of Beyond Globalization: Shaping a Sustainable Global Economy (1999) and seven other books on sustainable development. She serves on the editorial boards of FUTURES, (Elsevier, UK), FORESIGHT, Cambridge, UK and RESURGENCE, Devon, UK. Her editorials are syndicated by InterPress Service (Rome) to 400 newspapers in 27 languages. She is fellow of the World Business Academy and the World Futures Studies Federation, and advisor to the Calvert Social Investment Fund (Washington, DC) with whom she is co-creating the Calvert-Henderson Quality-of-Life Indicators. She held the Horace Albright Chair at the University of California, Berkeley, and has served on Committees of the National Academy of Engineering, the National Science Foundation, and the US Office of Technology Assessment.