Our key takeaway: Structural inequality is undermining human rights, the environment and our economy … and it’s also hindering the long-term success of business, according to the companies that are part of the Business Commission to Tackle Inequality (BCTI). Income inequality, a lack of equal employment opportunities, discrimination, environmental injustice and a skewed value-risk proposition all act alongside landscape issues like climate change, conflict, and the cost of living crisis to undermine benefits for people, planet and business. The BCTI urges companies to take a more decisive role in dismantling inequality, making sure to keep risks to people and the UN Guiding Principles on Business and Human Rights at the centre. Companies can take “catalytic actions” to contribute, including respecting human rights; enhancing accessibility of products and services; ensuring equitable and diverse workplaces; upskilling workers for the future of work; providing decent and safe work with living wages and incomes; supporting worker representation; supporting public policy to eradicate poverty and inequality, and adopting responsible tax practices; and ensuring a just transition to a net-zero, nature-positive economy. Companies will also need to take cross-cutting enabling actions, such as embracing a transformative “mindset shift” around its role in society, reorienting governance to focus on stakeholders, and disclosing information and impacts transparently.
The Business Commission to Tackle Inequality (BCTI), an initiative of the World Business Council on Sustainable Development, released Tackling Inequality: An Agenda for Business Action (May 2023):
- Inequality is a systemic risk with a clear business case for acting: The report spotlights a vast local and global wealth gap, pointing out that “the top 10% of earners now take home 52% of total global pay, while the lowest-paid 50% receive just 8.5%. Meanwhile, the richest 10% of the world’s population owns over three-quarters of all wealth, while the poorest 50% own a mere 2%.” At the same time, other landscape issues like climate change, continued impacts of the pandemic, armed conflict and the cost of living crisis are disproportionately increasing impacts to the most vulnerable people. The immediate and long-term impacts of structural poverty and embedded inequality pose risks not only for people, but for broader society and economies. And companies should take note: “inequality is eroding trust in our political and economic systems, unraveling the social fabric, fueling civil and political unrest, increasing the damage that crises like COVID-19 and climate change cause, constraining economic growth and undermining our collective capacity to tackle complex global challenges. It also represents a significant and mounting business risk.”
- The role for business: The report provides “the global business community with a clear and compelling business case for efforts to tackle inequality, as well as a common and holistic agenda for private sector action, grounded in opportunity and business reality.” What’s more, “inequality is not a fact of nature but a product of our systems, which we can change. Reducing inequality will require concerted action across all sectors of society – and business has an essential role to play.” As an engine of economic and social growth and innovation, the private sector has the opportunity to contribute to reducing inequality simply by virtue of doing business in a way that brings people along. The report defines six categories where business can lead in breaking down structural inequality. Crucially, the BCTI emphasises that all of these categories are underpinned by fundamental human rights and should be taken in line with the UN Guiding Principles on Business and Human Rights. The six categories include: Respecting human rights; Enhancing access to essential products and services; Creating jobs and economic opportunities for all; Distributing value and risk equitably; Enabling government action; and Accelerating climate and nature action.
- Ten catalytic actions for companies to take: The report points to ten “catalytic actions,” sitting within these six categories: (1) “Implement the UN Guiding Principles on Business and Human Rights [by] adopting policies and practices that put respect for human dignity at the center of how business gets done”; (2) “Make essential products and services more accessible and affordable [by] innovating and collaborating to ensure that all people have what they need to be healthy and productive”; (3) “Create a diverse, equitable and inclusive workplace and value chain [by] fostering work environments and markets in which all individuals are empowered to participate, prosper and reach their full potential”; (4) “Prepare people for the future of work [by] building a workforce that is skilled and empowered to benefit from developments that are transforming the world of work”; (5) “Provide safe, secure and sufficient work [by] ensuring that the terms and conditions of work protect and enhance the physical, mental, social and financial health and wellbeing of all workers”; (6) “Pay and promote living wages and incomes [by] eradicating poverty wages and ensuring that everyone who works earns enough to afford a decent standard of living”; (7) “Support and respect worker representation [by] giving workers greater ability to affect corporate decision-making about the terms and conditions under which they work”; (8) Support effective public policy [by] helping to propel government toward greater and more impactful action on inequality”; (9) “Adopt responsible tax practices [by] approaching tax as an essential part of good governance and a fundamental investment in the societies where business operates”; and (10) “Realize the just transition to a net-zero and nature positive economy [by] acting in line with science to address the climate emergency and restore nature, while leveraging these transformations to advance shared prosperity.”