For a Canadian version of this button, see https://www.historicflyingclothing.com/en-GB/escape-compasses/rcaf-escape-evasion-compass-button—rare-small-size/prod_17309#.X8rTv6lS-V4
Compass buttons came in varying forms. Some were fashioned in the form of magnetised trouser/shirt buttons, marked only with two dots for north, and one for south. When dangled from a string, they would give the direction. Other forms required two buttons to be balanced on each other to allow the top button to swing around to indicate north. I can’t imagine these were a great help, but perhaps it was more for the moral boost it provided. I am not sure where these were made; perhaps Britain.
However, WW2 was not the first time these were used …