How business leadership can advance Goal 10 on Reduced Inequalities
Equality is fundamental to a stable, just, prosperous, and peaceful society. In recent years, the benefits of economic growth have disproportionately favoured the world’s richest. In OECD countries, income inequality is at its highest level in the past half century. In developing countries, it has increased by 11 per cent between 1990 and 2010. Further, while there has been a narrowing in the average incomes between developed countries and some developing countries, average incomes in other developing countries have fallen further behind those in developed countries. Many groups, such as women, racial minorities and indigenous populations, still do not have equal access to opportunities - facing exclusion from business ownership and corporate decision making and discrimination related to wages, employment, and access to financial services. Intergenerational inequality is also a critical challenge – ensuring that future generations do not inherit a far-more polluted planet.
Contrary to the perception of many businesses, the private sector has a crucial role to play in addressing the systemic challenge of reducing inequality. Business impacts inequality through the decisions it takes on how to distribute the economic value it generates, including by deciding whether it pays living wages and how it structures executive pay; by paying or not paying taxes (in different countries) that are essential for funding inequality-reducing social security and public investment in health, education, and infrastructure; through the way it uses its economic and political influence to shape the marketplace and its regulatory environment. At the same time, the systemic challenges underpinning attainment of this Goal illustrate the need for collaborative action bringing together all stakeholders, especially Governments. In support of these collective efforts, all companies should pay their fair share of taxes, practice non-discrimination, comply with social and environmental regulation, and respect and support human rights. Responsible tax practice also involves progressive alignment of economic activities and tax liabilities (tax planning), country-by-country reporting on tax-relevant information, and transparent and responsible engagement with tax authorities.
