Assessing UNGC pharmaceutical signatories stakeholders using big data

• Author: Lori S. Cook,Ivana Zilic,Helen LaVan
• Date: 01 June 2019
• DOI: http://doi.org/10.1111/basr.12168
• Published date: 01 June 2019

Bus Soc Rev. 2019;124:201–217.

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201wileyonlinelibrary.com/journal/basr

DOI: 10.1111/basr.12168

ORIGINAL ARTICLE

Assessing UNGC pharmaceutical signatories

stakeholders using big data

IvanaZilic

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HelenLaVan

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Lori S.Cook

© 2019 W. Michael Hoffman Center for Business Ethics at Bentley University. Published by Wiley Periodicals, Inc., 350 Main Street, Malden,

MA 02148, USA, and 9600 Garsington Road, Oxford OX4 2DQ, UK.

Driehaus College of Business,DePaul

University, Chicago, Illinois

Correspondence

Ivana Zilic, Driehaus College of Business,

DePaul University, 1 East Jackson

Boulevard, Chicago, IL 60604‐2287.

Email: izilic@depaul.edu

Abstract

This article aims to focus on how signatories versus nonsig-

natories in the U.S. pharmaceutical sector compare with re-

spect to the internal and external stakeholders and principles

of the United Nations Global Compact (UNGC). We seek to

answer the question: Do signatories to the UNGC walk the

talk better than nonsignatories as determined by a variety

of published rankings and data? This research presents an

innovative approach to the evaluation of UNGC signatories.

It uses several objective and independent data sources to as-

sess a matched group of signatories versus nonsignatories in

the U.S. pharmaceutical sector. Signatory organizations in

the same sector as determined by SIC codes were matched

with nonsignatories on variables such as size and number

of employees in U.S. pharmaceutical companies. Then both

types of organizations were compared on the following

data sources: Coalition for Environmentally Responsible

Economies ratings, ratings by external stakeholders, ratings

by employees, unionization data, financial measures, and

annual reports to shareholders. Using nonparametric testing

the research found there are differences between signato-

ries and nonsignatories in the U.S. pharmaceutical sector for

some of the external stakeholder measures and no differ-

ences were found for the internal stakeholder measures.

KEYWORDS

Big Data, NVivo, pharmaceutical, signatories, stakeholder, UN Global

Compact

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ZILIC et aL.

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INTRODUCTION

The time seems to be propitious to evaluate whether being a signatory to the United Nations Global

Compact (UNGC) makes a difference with respect to how companies operate. This is the exact ques-

tion that this article seeks to answer. This perspective is in part due to the increased availability

of several data sources to assess efficacy of being a signatory. The composite of the multiple data

sources and volume of data available for the pharmaceutical companies facilitates the exploration of

the research question.

1.1

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Description of the UNGC and corporate social responsibility (CSR)

The six main aspects of business that UNGC covers include environment, social, governance, sus-

tainable development, financial markets, and supply chain.1

All those six aspects of business lead to

CSR. When a company becomes a signatory member of the UNGC it is required to annually submit a

communication on progress (COP) report which describes an organization's accomplishments in four

areas: human rights, labor, environment, and anticorruption. Those objectives are initiatives that guide

companies toward sustainable developmental goals. However, the type of the analysis that would be

necessary to ascertain attainment of all of these simultaneously is daunting.

The UNGC has become not only the most visible global governance initiative that promotes CSR;

it is also an initiative that is widely researched. Scholars have begun to analyze the impact of the

UNGC empirically, focusing on the following: relations between membership in the UNGC and CSR

implementation (Baumann‐Pauly & Scherer, 2013; Cetindamar, 2007; Schembera, 2016); on charac-

teristics that explain participation (Berliner & Prakash, 2012); the delisting of firms (Knudsen, 2011);

or the global spread of the UNGC (Bremer, 2008; Voegtlin & Pless, 2014).

Ramas astry (2015) notes “CSR and Business Human Resources (BHR) are like two close cous-

ins. Both concepts have key differences and hence distinct identities based on their origins,” CSR

emphasizes positive responsible behavior and BHR focuses on a more delineated commitment and

accountability in the area of internal/external stakeholders. In addition, Ramas astry thinks that CSR

may remain focused on voluntarism and aspirational notions of how companies should engage with

stakeholders. Furthermore, BHR may focus on corporate accountability as it pertains to the victims

of human rights violations. Wettstein (2015) thinks that companies can play a stronger role in the

promotion of internal/external stakeholders, but they may focus on BHR, which can be the negative

formulation of companies doing no harm. “There are some indications that governments will redefine

CSR to encompass a more limited vision of BHR. The EU has redefined CSR in a way that moves the

concept much closer to BHR.” The EU vision of CSR incorporated human rights due diligence as a

part of a CSR strategy.

Leisinger (2003) discusses several risks associated with implementing the UNGC principles.

The relevant risks are connected to human rights, civil and political rights, clinical trials, indigenous

rights, and external audit. Seeking to be in the forefront of adhering to the UNGC, the pharmaceutical

company Novartis appointed a small group of specialist from different background professions includ-

ing environmental experts, development experts, communications specialist, and lawyers. Novartis set

up specialized staff functions for human rights or development issues. Leisinger (2003) thinks that it

is important to be aware of values, whether there is any opportunity for changing business environ-

ment, and whether there is enough knowledge and communication skills for meaningful relations with

stakeholders.