Introducing the missing 11th principle of the United Nations Global Compact to reach sustainability – follow the money…
| Published date | 23 March 2020 |
| Pages | 355-367 |
| DOI | https://doi.org/10.1108/JMLC-12-2019-0099 |
| Date | 23 March 2020 |
| Author | Kalle Johannes Rose |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
Introducing the missing 11th
principle of the United Nations
Global Compact to reach
sustainability –follow the money...
Kalle Johannes Rose
Copenhagen Business School, Frederiksberg, Denmark
Abstract
Purpose –Recent research has emphasized theneed for engaging non-financial companies in combating
money laundering for theefforts to be efficient and effective. To incentivize engagement, several options are
available, such as regulation, voluntary disclosure or commitment to international principles such as the
United Nations(UN) Global Compact. The purpose of this paper is to analyzehow anti-money laundering fits
the aim of the UN Global compact and how anti-money launderingcan support the other principles of the UN
Global Compact.Furthermore, this paper addresses the necessity to include anti-moneylaundering in the core
principles to reach the overall goal of sustainability by the UN Global Compact. Such an inclusion will
incentivizethe signatories of the UN Global Compact to includeanti-money laundering as a part of their social
responsibilities,helping the financial sector in combatingmoney laundering.
Design/methodology/approach –The methodology of this paper is a functionalapproach to law and
economics. It seeks to enhance the efficiency of the regulatoryframework combating money laundering by
includingeconomic incentive theory and addressing new areas of law.
Findings –The paper finds a strong relationship between the UN Global Compact and anti-money laundering.
Furthermore, it is concluded that it is necessary to include anti-money laundering as a core principle in the UN
Global Compact if the Global Compact is to be efficient and effective in terms of its sustainability goals. The
reason being that money laundering to a great extent supplies operational finances to the illegitimate sector
related to core issues of the UN Global Compact such as human trafficking, childlabor and corruption.
Originality/value –The paper identifiesa significant missing element with regardto the core principles of
the UN Global Compact. Although most researchwithin anti-money laundering concerns the financial sector
and thereby does not addressthe UN Global Compact, the focus of this paper is the link between anti-money
laundering and the UN Global Compact. Furthermore, most research related to the UN global compact does
not connect the core principles to the illegal financing of the businesses contradicting the principles. This
paper addresses both of the neglectedareas and combines them to improve the overall combating of money
launderingwhile supporting the UN Global Compact sustainability goal.
Keywords Sustainability, CSR, UN Global Compact, Anti-money laundering, Legitimate economy
Paper type Research paper
1. Introduction
The United Nations Global Compact (hereinafter UN Global Compact or Global Compact)
began as a policy based on a speech in 1999 by the former secretary-general of the United
Nations (hereinafter UN) Mr. KofiAnnan. The Global Compact has since developed and
grown into “the world’s largest corporate sustainability initiative”with more than 9,500
companies and 3,000 non-business signatories across 160 countries (United Nations Global
Compact, 2018). Since the introductionof the Global Compact, corporate social responsibility
(CSR) has gained momentum on a global level,thereby enhancing the need for global ethical
business standards. The core of the Global Compact is the ten principles that focus on
United Nations
Global
Compact
355
Journalof Money Laundering
Control
Vol.23 No. 2, 2020
pp. 355-367
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-12-2019-0099
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