A business pledge against inequalities

 

Working hand in hand with the 2019 French G7 Presidency, the OECD has managed to rally governments, businesses and investors around a common agenda to make business more inclusive.

 

What’s the issue?

Rising inequalities is a defining challenge of our time. Globalisation and technological innovation have created tremendous opportunities for economic growth, prosperity and health. However, today inequality is rising in OECD countries and beyond. The “middle class” – the backbone of a healthy economy – is shrinking in most OECD countries, hitting the younger generation the hardest.

What’s more, geographical inequalities have risen sharply, with larger metropolises driving growth and reaping its benefits, and smaller cities and rural areas falling behind. Persistently, high and rising inequality risks fracturing societies and undermining economic and business growth. Growing numbers of citizens are therefore demanding a new economic growth model that puts people at the centre, delivering better outcomes and ensuring more inclusive societies.

How’s it being addressed?

Governments cannot go it alone in the fight against inequality; businesses have an essential role to play. On that account, the Business for Inclusive Growth coalition was created to expand and scale concrete impact in creating a more inclusive society. This OECD-powered initiative aims to pool and strengthen efforts by private companies to reduce inequalities linked to gender, age or geographic origin, and to build greater synergies with government-led efforts.

On 23rd August 2019 in the margins of G7 Leaders’ Summit, B4IG companies committed to play their part in advancing the G7 agenda to strengthen equality of opportunity; reduce territorial inequalities; promote diversity and inclusion; and reduce gender inequality by:

1. Advancing human rights in direct operations and supply chains;

2. Building inclusive workplaces; and

3. Strengthening inclusion in company value chains and business ecosystems.

To help deliver on these pillars, governments, business leaders and the OECD will work together to define actions or strategies that can trigger systemic change and activate them not only within the companies taking the pledge, but also through catalysing action in companies that pledgees work with and/or invest in. This collective effort will drive on-the-ground transformation by building, piloting and scaling models for inclusive business including through the B4IG incubator, and by developing a measurement framework that can be used to assess impact.

 

		“It’s not a matter of ideology, it is a hard realism that calls us to a collective and inclusive action, for both governments and companies. With Business for Inclusive Growth, our aim is to build a constructive dialogue to advance social inclusion, pilot and scale innovative, inclusive micro-economic business models, and thereby contribute to inform macroeconomic policies.” Emmanuel Faber, Danone Chairman and CEO
23/08/2019 - French President Emmanuel Macron, OECD Secretary-General Angel Gurria with CEOs of major international companies who have signed the pledge to tackle inequality and promote diversity in their workplaces.

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What’s the impact?

Thus far, 34 businesses have come together through Business for Inclusive Growth to ensure that the benefits of economic growth are shared far more widely. They will seek to tackle persistent inequalities of opportunity, reduce regional disadvantages and fight gender discrimination. Collectively, the current members have a large social and economic footprint, with over 3 million employees and USD 1 trillion in annual turnover. Altogether, these companies have joined forces via Business for Inclusive Growth to invest a combined total of USD 1 billion in more than 50 projects.

This initiative is not just good corporate citizenship; it is the future of successful business. Companies benefit from inclusive growth through a more educated and engaged workforce; a larger middle class of consumers with greater purchasing power; more stable operating environments; and a high level of trust from employees, customers and stakeholders. Expanding workforce opportunities and skills benefits employees, but also drives performance. Advancing human rights within business operations and supply chains makes them safer, more secure and stable, and thus has the potential to boost productivity for all actors involved.