Australian SDGs Hub For Business

                                

Inequality undermines human potential, social stability and economic growth. It can be based on gender, race, religion, disability, sexual orientation, class or ethnicity, and occurs between nations and within nations.

In early 2017, the World Economic Forum ranked inequality and polarisation among the top three underlying drivers of global risk1, while according to the UN Development Programme the world is more unequal today than at any point since the 1940s.2

It is estimated that the world’s wealthiest 10% own 89% of all global assets, while the bottom 50% of the world population owns less than 1%.3

By WEF estimates, it will take more than a lifetime for women to achieve equality with men across four key areas of health, education, economics and politics. The widest gaps are in economic participation, where progress has recently reversed, and political empowerment, where progress is slow and steady.4

Within Australia, the richest 1% of the population has 22% of the nation’s wealth. The poorest half of the population control around 6% of the nation’s wealth.5 Aboriginal and Torres Strait Islander people suffer disadvantage on a number of fronts, including health, education and incarceration.7

 

How is this relevant to business?

Addressing inequality makes good business sense because it increases economic participation and helps build markets and prosperity.

Long term viability is only possible when the world is thriving, but the world can’t fully prosper when large population groups lack reasonable paths to success.

Diversity of background and experience within an organisation stimulates innovation and fresh thinking. It creates a more attractive work environment that in turn helps to attract and retain talent. Diversity can be thought of as a multi-faceted competitive advantage.

“Equality and diversity are strategic business issues. It has been well demonstrated that businesses that embrace workplace diversity and inclusion are more innovative and outperform in organisational effectiveness and profitability. Corporate social responsibility is becoming a critical factor to a growing number of global investors and the capital markets.” (extract from joint letter from Australian business leaders in support of marriage equality to Prime Minister Malcolm Turnbull, 2017)

 

What can business do?

Businesses exacerbate inequality by sticking to behaviours that don’t reflect modern society. This includes failing to pay men and women equally for the same work, sticking to inflexible working hours and conditions and not catering for people with physical disabilities.

There are significant opportunities for the private sector to address inequality, beginning with their own employment practices but spreading beyond that to a broader sphere of influence that includes suppliers, customers and other stakeholders.

Companies should ask questions and seek evidence from suppliers about how they look after the welfare of their employees and others in their value chain. Where suppliers aren’t performing on equality benchmarks, this is an opportunity to share knowledge, offer training materials and jointly work on a roadmap to better outcomes.

There is scope to partner with other like-minded businesses and assist governments and NGOs in this space. The private sector is increasingly stating a public position on social issues, as seen in Australia on the issue of marriage equality.

Act Responsibly

  • Identify any ways that the business might be contributing to inequality and think broadly in doing so (e.g. in relation to employees, access to products and services, unequal impacts of projects on community members)
  • Ensure non-discrimination in the workplace
  • Respect human rights
  • Pay a living wage to employees and encourage other businesses in the value chain to pay living wages as well

 Find Opportunity

  • Agree and implement an acceptable ratio between your highest paid executive earnings and the earnings of your lowest paid workers
  • Create opportunities for lower paid workers to develop their skills and gain access to improved employment opportunities, both within and outside the sector
  • Incorporate special considerations into local skill development and procurement initiatives which take into account the needs of historically marginalised groups in areas of operation
  • Adapt business strategy in production, distribution, and marketing to make products more affordable and accessible for consumers on low incomes
  • Implement a Reconciliation Action Plan that identifies practical steps to build relationships with and create economic opportunities for Aboriginal and Torres Strait Islander Australians

 

Links between Goal 10 and the UN Global Compact’s ten principles

Human Rights & Labour (UN Global Compact Principles 1, 2, 3, 4, 5, 6)

Equality and non-discrimination are fundamental human rights. Inequality also undermines people’s ability to enjoy all other human rights.

Environment (UN Global Compact Principles 7, 8, 9)

Pollution of land, sea and air and the effects of climate change pose the greatest harm to the world’s most vulnerable people, and risk further entrenching social and economic inequalities.

Anti-Corruption (UN Global Compact Principle 10)

Corruption increases income inequality and perpetuates an unequal distribution of asset ownership and access to education. .

 


1 World Economic Forum (2017), http://reports.weforum.org/global-risks-2017/

2 United Nations Development Programme (2016), http://www.undp.org/content/undp/en/home/librarypage/sustainable-development-goals/undp-support-to-the-implementation-of-the-2030-agenda.html

3 Credit Suisse, http://publications.credit-suisse.com/tasks/render/file/index.cfm?fileid=AD783798-ED07-E8C2-4405996B5B02A32E

4 World Economic Forum, http://reports.weforum.org/global-gender-gap-report-2016/the-global-gender-gap-report-2016/

5 Oxfam Australia (2017), https://www.oxfam.org.au/wp-content/uploads/2017/01/2017-PA-002-Inequality-Report-V3a.pdf

6 Attorney-General for Australia (2016), https://www.attorneygeneral.gov.au/Mediareleases/Pages/2016/FourthQuarter/Consultation-opens-for-inquiry-into-the-incarceration-rate-of-indigenous-australians.aspx

7 Oxfam Australia (2017), https://www.oxfam.org.au/what-we-do/inequality/find-out-more/

GOAL TARGETS

10.1
By 2030, progressively achieve and sustain income growth of the bottom 40 per cent of the population at a rate higher than the national average

10.2
By 2030, empower and promote the social, economic and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion or economic or other status

10.3
Ensure equal opportunity and reduce inequalities of outcome, including by eliminating discriminatory laws, policies and practices and promoting appropriate legislation, policies and action in this regard

10.4
Adopt policies, especially fiscal, wage and social protection policies, and progressively achieve greater equality

10.5
Improve the regulation and monitoring of global financial markets and institutions and strengthen the implementation of such regulations

10.6
Ensure enhanced representation and voice for developing countries in decision-making in global international economic and financial institutions in order to deliver more effective, credible, accountable and legitimate institutions

10.7
Facilitate orderly, safe, regular and responsible migration and mobility of people, including through the implementation of planned and well-managed migration policies

10.a
Implement the principle of special and differential treatment for developing countries, in particular least developed countries, in accordance with World Trade Organization agreements

10.b
Encourage official development assistance and financial flows, including foreign direct investment, to States where the need is greatest, in particular least developed countries, African countries, small island developing States and landlocked developing countries, in accordance with their national plans and programmes

10.c
By 2030, reduce to less than 3 per cent the transaction costs of migrant remittances and eliminate remittance corridors with costs higher than 5 per cent

 

FURTHER RESOURCES

Corporate Human Rights Benchmark (CHRB) ranks the top 500 globally listed companies on their human rights policies, processes and performance. A comprehensive draft list of indicators is helpful to companies working with broad human rights.


The Human Rights and Business Country Guide provides country-specific guidance to help companies respect human rights and contribute to development. The guide provides a systematic overview of human rights issues for particular attention by business and provides guidance on how to ensure respect for human rights in company operations or in collaboration with local suppliers and business partners.


The Human Rights Compliance Assessment (HRCA) is a diagnostic tool designed to help business detect potential human rights violations caused by their operations on employees, local residents and all other stakeholders.


The Guide to Human Rights Impact Assessment and Management (HRIAM) enables businesses to identify, understand, and evaluate actual or potential human rights impacts of a project at each stage of development and operations. This approach links human rights assessment to existing management processes.


The Global Impact Investing Network’s Impact Reporting & Investment Standards (IRIS) is a free-to-use catalogue of generally-accepted performance metrics used by leading impact investors to measure social, environmental, and financial success, evaluate deals and grow credibility.


The Social Hotspots Database (SHDB) project offers an online database that allows users to browse data on social risks by sector, country, or risk theme. There are 227 countries and 57 economic sectors to choose from. The data comprehensively addresses social issues on human rights, working conditions, community impacts and governance issues, via a set of nearly 150 risk indicators grouped within 22 themes. Risks are also expressed, whenever relevant, by country and sector.


The UN Global Compact – Oxfam Poverty Footprint assessment tool enables business and civil society partners to understand impacts on poverty all along a company’s value chain. It can help establish pro-poor business strategies, and promotes greater corporate transparency and meaningful stakeholder engagement.


For more goal-related tools, go to the Inventory of Business Tools webpage on the SDG Compass website. Businesses can explore and find commonly used tools when assessing their impact on SDGs.