As global inequality rises, what can companies do?

A huge concentration of global corporate and monopoly power is exacerbating inequality economy-wide, according to Oxfam’s Inequality Inc report. It notes that the richest five men in the world have doubled their fortunes since 2020. During the same period, almost five billion people globally have become poorer.

The report says that rising inequality can be tackled and a more equal world is possible through solutions which effectively regulate the private sector. To achieve this the report recommends that governments aim to reduce inequality to reach a point where the bottom 40% of the population have around the same income as the richest 10% (Academics call this the Palma Ratio).

To reach this point Oxfam says governments must promote businesses which are owned and governed in the interest of workers and the environment. Not putting the interests of shareholders first means competitive and profitable businesses do not have to be controlled by shareholder greed, it says. This promotion can be done by providing financial support and using economic instruments such as tax to put equitable business models first. 

The report recommends that governments introduce new legislation and governance reforms to reduce inequality. Oxfam says companies should get ahead of  changes to legislation and do their part to reduce inequality by:

• publishing high quality data on key aspects used to measure inequality such as gender and racial pay gaps; 

• ensuring strategies created to target inequality are time-bound with measurable objectives;

• paying the standard living wage to all employees and implementing a strategy to ensure that all workers in the supply chain receive a living wage;

• investing resources into a low-carbon transition with a clear trajectory to achieve the objectives of the Paris Agreement;

• gaining an understanding of their entire supply chains to identify and manage human rights and environmental risks and impacts; and

• implementing and publishing gender and inclusion policies as part of a published diversity strategy, including equal paid parental leave, with the aim to achieve diversity in terms of race, educational background and expertise.

Read the full report here.