Subsidiary Participation and Communication on Progress

Companies joining the United Nations Global Compact commit to implementing the ten principles within their sphere of influence. They are expected to take continuous and comprehensive efforts to advance the principles wherever they operate – working toward a globally coherent approach to corporate responsibility.

It is important that companies spread their commitment to the Global Compact throughout their operations around the world, including subsidiaries, local branches and local ventures. For multinational participants of the Global Compact, the engagement of subsidiaries can generate significant business value and is one of the most important contributions that can be made to scale up corporate responsibility efforts.

There are several ways that subsidiaries of companies can participate in the Global Compact:

Only Headquarters Participates:

Some companies prefer to limit participation in the Global Compact to the headquarters, assuming that their commitment applies to all subsidiaries and, therefore, separate commitment by subsidiaries or local affiliates is not advocated by the company.
Only the headquarters company will be listed on the Global Compact website.
The headquarters company is expected to communicate annually on their progress to implement the GC principles both globally and locally – in line with the Communication on Progress (COP) policy.

Headquarters and Subsidiaries Participate:

Some companies encourage subsidiaries to join the Global Compact directly, in addition to the headquarters commitment, by sending their own letter to the United Nations Secretary-General.
Joining subsidiaries will also be listed as participants on the Global Compact website.
Both the headquarters and participating subsidiaries are expected to communicate annually on their progress to implement the GC principles. This can be accomplished by:
1. The headquarters and participating subsidiaries each submit individual COPs; or
2. The headquarters creates one COP that explicitly covers the efforts made by all of the company’s participating entities. In this case, all participating subsidiaries post the headquarters COP to fulfill their COP obligation.

Only Subsidiaries Participate:

Some subsidiaries decide to join the Global Compact even though their parent company is not a participant.
Joining subsidiaries will be listed as participants on the Global Compact website.
These companies are expected to communicate annually on their progress to implement the GC principles in line with the COP policy.

Note: Within this policy, the term "subsidiary" is used to cover all types of Global / Local organizational structures.