Tackling inequality: An agenda for business action
Last May, the Business Commission to Tackle Inequality (BCTI), a cross-sector, multi-stakeholder coalition of leaders and their organizations convened by the World Business Council for Sustainable Development (WBCSD), published its flagship report Tackling inequality: An agenda for business action. It provides a detailed and compelling narrative for understanding inequality [among humans] as a global systemic issue – “that poses an existential threat to our society and economy” – and the role that businesses can and should play in addressing it. It broadly defines the concept of inequality to comprise inequality of income, wealth, wellbeing, and opportunities.
The BCTI identifies and explains how inequality is:
- eroding trust in our political and economic systems
- unravelling the social fabric
- fueling civil and political unrest and polarization
- increasing the damages that crises cause (think pandemic, climate catastrophes)
- constraining economic growth
- undermining our collective capacity to tackle complex global challenges and achieve a state of sustainability
Bringing it down to the micro dimension, inequality translates into significant business considerations, such as:
- volatile operating environment
- supply chain insecurity
- erosion of productivity and innovation
- regulatory and compliance risks
- reputation risk
- access to capital
It's probably no coincidence that we are seeing accelerated policy action on human rights in many jurisdictions, including Canada's upcoming Fighting Against Forced Labour and Child Labour in Supply Chains Act and the European Union's Corporate Sustainability Due Diligence Directive (CSDDD), which will legally require companies to assess their value chain for human rights violations and take measures to address any that they find.
The BCTI report also identifies relatively concrete actions that companies can take to contribute to reducing inequality within their business ecosystem, the cumulative effects of which would be felt globally:
- Implement the UN Guiding Principles on Business and Human Rights
- Make essential products and services more accessible and affordable
- Create a diverse, equitable and inclusive workplace and value chain
- Prepare people for the future of work
- Provide safe, secure and sufficient work
- Pay and promote living wages and incomes
- Support and respect worker representation
- Support effective public policy
- Adopt responsible tax practices
- Realize the just transition to a net-zero and nature positive economy
Finally, in taking action companies are invited to apply the “sustainable business transformation framework”– an approach that most should be familiar with by now, because it applies to pretty much any material business/sustainability issue:
- Baselining and maturity assessment
- Prioritizing action areas and setting targets
- Strategic integration and implementation
- Social performance review
- Communication on progress
Very interestingly, the report identifies a mindset shift as foundational to driving success in addressing inequality. Indeed, mindset is the most powerful lever of change. It’s also the hardest to achieve, which helps explain why we’ve advanced so little on our sustainability agenda. Case in point: the BCTI leaders have grounded their work within the traditional business construct of growth.
Food for thought.