Market economies have brought and continue to bring enormous benefits to broad swaths of the world's population. However, it is right to acknowledge that the current model also currently contributes to an unsustainable widening of economic and social inequality. The challenge is how to harness the power of the market economy to meet these challenges and improve outcomes for everyone. Tackling inequality requires changing business practices and models.
that's the conclusion Tackling inequality: Challenges for corporate action, an important report from the Business Council on Tackling Inequalities (BCTI), launched on 3 May 2023, in which PwC, along with a range of other leading companies and organizations, Contributed under the auspices of the World Business Council (WBCSD). The report identifies 10 areas of action that companies can focus on to tackle inequality, and stakeholder expectations for such action to be taken are increasing.
Too often, current business models and practices do not differentiate between the interests of individual companies and the interests of the world as a whole. In fact, it can actually reward companies that deplete the natural, social, and human capital that underpins overall economic value creation.
At PwC, we have always passionately believed that businesses should be in the business of driving positive social change, driving progress and sustainability, and sharing prosperity. This challenge is closely linked to successful, resilient businesses that are sustainable over the long term and command the respect of society.
The BCTI report identifies three fundamental goals that all of us in the business world need to work towards.
- Enabling businesses to: Make better decisions. We deliver the products, services and business model innovations you need. Contributing to the realization of a prosperous and sustainable society. Companies that make better decisions, deliver needed product, service and business model innovation, and contribute to a prosperous and sustainable society. Capital markets, on the other hand, properly value inclusive and sustainable business practices and reward companies that have the greatest positive impact on society and the environment, while at the same time ensuring that businesses, assets and We need to mobilize capital for solutions.
- A new way of thinking for business leaders in general. All people need to recognize that they are part of a broader system and be open to adapting, evolving and sharing prosperity. The old ways of doing things in so many companies are no longer viable, and the term “status quo” is often translated as “the mess we're in.” Business leaders especially need to recognize the tremendous value of a skilled, healthy workforce and vibrant communities. They must also be aware that there are serious reputational risks if they do not act in their own best interests.
- Accept rebirth. Such thinking means moving beyond a “first, do no harm” approach to one that is designed to help social and environmental systems regenerate and thrive. As social tensions spiral and ecosystems face tipping points, it is important to embrace regenerative approaches and not just try to cling to old ways. Regenerative thinking helps restore and nurture the social and environmental systems on which business success depends.
Ultimately, sustainable progress in tackling inequality depends on businesses being able to adequately identify, measure and understand their direct and indirect impacts and dependencies on people.
Gain relevant and useful information to make decisions, as companies need to consider how they create, maintain, or destroy value for various stakeholders over time That is essential. Attention to the “S” in ESG has increased dramatically in recent years. This is partly a result of the different societal vulnerabilities and risks that COVID-19 has exposed, but also because of rapidly evolving and less permissive regulatory frameworks. Necessary changes will occur.
To help you plan this journey, the BCTI report recommends applying the Sustainable Business Transformation Framework approach as a practical way to manage the complexity of the future while ensuring you achieve the progress you need. is recommended. More specifically, this framework includes five key steps.
- Baseline and maturity assessment
- Prioritize areas of action and set goals
- Strategic integration and implementation
- Social performance review
- Communication of progress
It is critical that we set ambitious goals, especially when the stakes are so high, especially in terms of securing a viable future for our planet and those who come after us. As the BCTI report makes clear, these make sense not only for the planet and its people, but also for business.
Another recent initiative by PwC in collaboration with WBCSD considers the need for businesses, governments and other stakeholders to work together towards a just transition in the energy system, with the aim of improving people and society. The aim is to reduce the negative impact of Leverage opportunities in a way that is fair and inclusive for all. To learn more about our insights, see Achieving a Just Transition for the Energy System.
