ESG: From Ambition to Behavioral and Systemic Transformation – Insights from the New Five-Year Plan of the UN Global Compact

Global Sustainability Standards Board (GSSB) Board Member
GHG Protocol Technical Working Group (TWG) Members
Director of Zeroboard Research Institute Tomoo Machiba

In mid- January 2026, the United Nations Global Compact (UNGC) released its "2026–2030 Strategy" *1) , a plan of activity for the remaining five years until the deadline for achieving the Sustainable Development Goals (SDGs) (Figure 3). Amidst the intensifying climate change, widening inequality, and the rapidly increasing geopolitical instability of recent years, the UN and governments are losing their ability to offer solutions. In a world plagued by complex Issue that no single sector can solve alone, the strategy was Create to reaffirm the crucial role of businesses and enhance the effectiveness of their actions. Although facing increasing criticism, particularly in Europe and North America, sustainability and ESG have undeniably become critical management factors influencing a company's competitiveness and survival. This article will analyze this new strategy and consider how Japanese companies should implement sustainability in their management through participation in the UNGC, alongside other international disclosure frameworks.

Growth of the Global Compact

The United Nations Global Compact is based on "10 principles" (Table 1) spanning four areas: human rights, labor, environment, and anti-corruption, as well as the "UN 2030 Agenda," including the SDGs. Launched in July 2000 at the suggestion of then-UN Secretary-General Kofi Annan, it has grown into one of the world's largest corporate initiatives on sustainability. Previously, actors primarily envisioned for achieving sustainability included national governments, local authorities, labor unions, and NGOs, who were involved in UN discussions. However, at that time, expectations began to rise for the active involvement of multinational corporations in addressing social Issue. Currently, more than 23,000 companies from over 160 countries participate, activity through five regional hubs and a network of over 60 national companies *2) .

Table 1: Ten principles across four areas that the UN Global Compact requires of signatory companies *3)

The Global Compact Network Japan (GCNJ), the network in Japan, has 681 member companies and organizations as of March 2026. Under the framework of "Collective Action 2030," GCNJ promotes subcommittee activity on themes such as value chain management, climate change and biodiversity, equitable working conditions, human rights and labor, and anti-corruption. For many years, it has supported the translating of global ambitions into local actions, building networks among member companies, and creating collective impact *3) .

The "Communication on Progress (CoP)," in which UNGC member companies report their activity toward achieving the SDGs based on the 10 principles using a questionnaire, was digitized in 2023, and quantitative and qualitative information disclosure, including gap analysis and target Settings, became mandatory. With approximately 11,000 submissions worldwide, it has made a significant contribution to improving corporate transparency and strengthening accountability in the market *4) . In addition, the "Forward Faster" initiative, a new framework that calls on companies to accelerate action toward the nine specific goals toward achieving the SDGs, has emerged, and more than 1,600 companies are promoting commitments toward climate change, gender equality, and a living wage (Figure 1) *5) . 2025 marks an important milestone: the 80th anniversary of the founding of the United Nations, the 25th anniversary of the founding of the UNGC, and just five years remaining until the achievement of the SDGs.

Figure 1: Shows the commitments of participating companies to the nine goals for achieving the SDGs.
Forward Faster website *5)

Background and overview of the Five-Year Plan

The "2026-2030 Strategy" aims to link companies' sustainability ambitions not merely to commitments, but to "measurable results and system-level transformation." Sanda Ojambo, Assistant Secretary-General of the UN who became the first CEO of the Global South from Kenyan telecommunications Company Safaricom in 2020, succinctly states the background of the new strategy as follows: "In a world of increasing scrutiny and constantly changing expectations, responsible business is resilient." *6) According to the "CEO Survey Report 2025," compiled by UNGC and Accenture from approximately 2,000 CEOs of signatory companies in 128 countries, 88% of executives responded that "the business case (basis for return on investment) for investing in sustainability is stronger than it was five years ago." Amid the rapid spread of AI and the expansion of data centers, which are increasing pressure on Energy and water resources, even companies that have been seen as not focusing on climate change are accelerating investments in efficiency and resilience. *7)

On the other hand, the rise in geopolitical risks due to Russia's invasion of Ukraine and the return of US President Trump is casting a dark shadow over responses to various sustainability Issue and progress towards the SDGs. In addition to the rapidly changing political landscape, persistent inflation and an evolving regulatory environment are putting pressure on corporate management, and in Europe, the simplification of Green Deal policies through the "Omnibus Package" has been decided in response to this backlash. However, on the environmental side, serious climate disasters such as record heat waves are occurring frequently, highlighting the delays in climate change mitigation measures and adaptation. For Japanese companies, the reality is that they are facing practical obstacles in promoting human rights and environmental due diligence involving the entire supply chain and reducing GHG emission amount(especially Scope 3), which cannot be resolved by themselves.

The "2026–2030 Strategy," formulated against this backdrop, centers on the following three strategic priority areas *1) .

1. Empowering businesses to take action: Integrating evidence-based goal Settings and human rights due diligence into business operations through digital support tailored to the size and location of each company.

2. Mediating collaborative action: Forming enterprise-led, multi-stakeholder coalitions that transcend markets and Industry to address institutional barriers such as policy fluidity and funding shortages.

3. Advancing the business case: In collaboration with the Principles for Responsible Management Education(PRME) *8) proposed by the UNGC in 2007, we will develop a data infrastructure that demonstrates how responsible management directly leads to the creation of long-term value for companies.

Furthermore, the plan is to concentrate resources on four high-impact areas where private sector leadership is essential: ① climate and nature, ② decent work and living wages, ③ gender equality, and ④ sustainable finance, and to accelerate transformation through recommendations at the CEO level and the deployment of standards to suppliers.

Particular emphasis is placed on the full utilization of digital platforms and a "data-driven approach." The revamped CoP has evolved from a mere reporting tool into a platform that provides comparable information disclosure, benchmarking with other companies, and insights to aid in decision-making (Figure 2). This will enable companies to objectively understand their own position and present evidence to boards of directors and investors that "sustainability and profitability are complementary." The UNGC is strongly encouraging companies to view addressing environmental and social Issue not as a cost, but as a "strategic investment."

Figure 2: Digital platform for UNGC Annual Progress Report (CoP) *9)

Use in conjunction with other international frameworks

It is important to clarify here the differences and complementary aspects between various disclosure frameworks and the new UNGC strategy and CoP.

International Sustainability Disclosure Standards (IFRS S1/S2), Japan's Sustainability Standards Board of Japan (SSBJ) standards, and legal disclosure regulations in various countries, including the European Corporate Sustainability Reporting Directive (CSRD), as well as voluntary disclosure standards such as the GRI Standards, focus on the "how" (methods) and "what" (results) of "what information should be calculated and disclosed, and by what criteria." These are primarily tools aimed at ensuring transparency for investors and a wide range of stakeholders, based on financial materiality and impact materiality.

On the other hand, the UNGC's 10 principles, new strategy, and the resulting Council of Projects (CoPs) provide fundamental management values ​​on why companies should engage in sustainability, and focus on the "process of action and systemic transformation"—how to translate those principles into business processes and supply chain behaviors.

Therefore, these should not be mutually exclusive but rather integrated and utilized. Companies should leverage the UNGC network and tools to Settings their ambitions and goals and drive substantive systemic transformations (such as collaborative actions and supplier engagement). The resulting accumulated environmental and social data should be objectively and precisely calculated and disclosed in accordance with standards such as SSBJ and GRI, and further input into the UNGC CoP platform to gain global benchmarks and appeal to investors. The key to driving both this practice (UNGC) and disclosure (IFRS S/SSBJ/GRI/ CSRD) is the construction of a robust data management platform that can accurately collect and centrally manage ESG information from both inside and outside the company.

How can Japanese companies leverage the new strategy?

The "2026-2030 Strategy" can serve as a compass for Japanese companies in implementing and transforming their sustainability management systems.

Firstly, it is crucial to actively utilize the digital learning and CoP benchmarking functions provided by the UNGC to objectively understand the gap between one's current position and global standards. In particular, net-zero emissions, as well as the transition to nature-positive practices and respect for human rights in supply chains, are essential requirements for Japanese companies to maintain their competitiveness in the global market.

Secondly, it is important to go beyond individual company initiatives and participate in collaborative actions through GCNJ. Going forward, GCNJ will work in conjunction with the headquarters' new strategy to further strengthen the creation of practical solutions and subcommittee activity based on four high-impact areas. By collaborating with other companies and participating in policy recommendations and cross-industry rule-making, it becomes possible to overcome institutional barriers and supply chain Issue that cannot be overcome by a single company.

Thirdly, there is the need for advanced data management to validate business cases. Accurate calculation of Scope 3 emission amount and the implementation of environmental and human rights due diligence with suppliers require the collection and centralized management of primary data. Managing and visualizing scattered ESG data within an integrated system is the shortest path to complying with increasingly complex disclosure regulations while demonstrating and leveraging sustainability as a source of competitive advantage.

Figure 3: UNGC's pre-2024-2025 strategy *10) and new 2026-2030 strategy *1)

Gain trust and competitiveness through data infrastructure construction.

As CEO O'Jumbo states, "Responsible business is not a side project, but the core of long-term value creation and a more stable and investable global economy" *11) . In these times of increasing geopolitical tensions and economic uncertainty, companies that adhere to the 10 principles—building resilient supply chains, steadily expanding energy conservation and renewable energy, and investing in human and natural capital—will lead the next wave of growth.

The "shift from ambition to action" and "proof of business case" outlined in this strategy will by no means be easy. However, by leveraging a robust data infrastructure and driving both practice and disclosure, Japanese companies should be able to gain unwavering trust and competitiveness in the global market. I hope that the next five years, which have just begun, will be a period of sustainable development for both the company and society, contributing to the achievement of the SDGs.

*1) United Nations Global Compact (UNGC), UN Global Compact Strategy 2026-2030, New York, 2025. https://info.unglobalcompact.org/strategy_260109

*2) UNGC website. https://unglobalcompact.org

*3) Global Compact Network Japan (GCNJ) website : https://www.ungcjn.org

*4) UNGC "Communications on Progress (CoP) 2024 Insight Report" (Japanese version), 2025 https://www.ungcjn.org/activities/topics/detail.php?id=736

*5) UNGC, Forward Faster website. https://forwardfaster.unglobalcompact.org

*6) UNGC, UN Global Compact Strategy 2026-2030 website. https://info.unglobalcompact.org/ungc_strategy ;

*7) GCNJ, "UN Global Compact and Accenture Publish CEO Survey Report 2025,"October 6, 2025. https://www.ungcjn.org/activities/topics/detail.php?id=744

*8) UNGC, Principles for Responsible Management Education website. https://www.unprme.org

*9) UNGC, The Communication on Progress website. https://unglobalcompact.org/participation/report/cop ;

*10) UNGC, UN Global Compact Strategy 2024–2025: Global Strategy Extension, New York, 2023. https://kss.unglobalcompact.org/what-is-gc/strategy

*11) UNGC, “UN Global Compact Unveils 2026–2030 Strategy to Turn Corporate Ambition into Action”, press release, 13 January 2026. https://unglobalcompact.org/news/un-global-compact-unveils-2026-2030-strategy-turn-corporate-ambition-action