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Businesses Need to Move CSR Beyond Headquarters, Report Says

The number of companies joining a U.N. corporate responsibility initiative grew 30 percent last year.

Nearly 1,500 global businesses signed on to the United Nations Global Compact in 2008, signaling the growing interest of businesses that want to align their practices with the initiative's environmental, social and governance principles.

Though interest is up, progress in integrating the principles beyond corporate headquarters lags, according to the Global Compact's annual report. The voluntary initiative, launched in 2000, encourages businesses to enact policies that reflect its 10 human rights, labor, environment and anti-corruption principles. Members must also report on their implementation.

Just 7 percent of the 700-plus respondents in the annual survey require Global Compact participation when selecting suppliers. About a third said they extend their commitment to the Global Compact to their subsidiaries.

"The Annual Review 2008 underscores the Global Compact's positive contribution to the worldwide diffusion of responsible business practices," George Kell, the Global Compact executive director, said in a statement. "However, companies everywhere must do much more to ensure that environmental, social, and governance challenges are understood and properly addressed. For corporate responsibility to deliver tangible results, suppliers and subsidiaries my be made part of the equation."

The Global Compact removed 404 companies from its corporate reporting initiative last year because the organizations failed to communicate progress on their efforts. More than 800 companies have been de-listed.

More than 5,000 global companies in 130 countries participate in the initiative, with engagement growing in China and India.

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