Inequality is amplified and poses a growing threat by crises, from pandemics to climate change – a systemic risk that threatens the political and economic foundations that businesses rely on to operate, innovate and grow. Businesses have powerful levers at their disposal, and powerful reasons to use them. We need to manage their impacts on people with the same care that we manage carbon.
At a time when the richest 10% of the world's population earn more than half of the world's income and only a handful of countries have the right conditions for real improvement, people are losing faith that the political and economic systems on which corporations depend will benefit them and their families.
The International Panel on Climate Change (IPCC) has stated that inequalities related to gender, ethnicity, income and other factors increase vulnerability to climate risks and impacts, and has called for action to address inequalities as a key means of achieving climate resilience and adaptation.
Businesses have powerful levers to join this important effort—and meaningful reasons to do so.
There is a deep business rationale for a comprehensive and interconnected agenda to mitigate both the systemic and business risks caused by inequality. Addressing inequality in corporate value chains is a journey that all companies must begin, creating a ripple effect that will have a positive impact.
- Mitigate: To prevent and minimize negative impacts, companies must implement the UN Guiding Principles on Business and Human Rights to stay ahead of regulatory change. Start with your own operations, building strong corporate governance to reinforce and support your commitments and practices, then scale up and down the line.
- to repair: Build the capacity, trust and accountability needed to drive positive outcomes across the value chain. Mobilize resources, measure and disclose responsible business practices.
- Moving ForwardPromote social equity and gender equality by extending reach to n-tier suppliers and workers in the value chain, tracking measures of effectiveness for positive outcomes and informed decisions, and ensuring the license to operate by building trust among employees, consumers, and society at large.
you are not alone
Global obligations are not easy to manage. Regulations are complex, increasingly stringent and market-specific. Data is scattered across multiple systems, collection and processing is largely manual and often lacks insights to support collaboration between stakeholders towards equality.
Your company is not alone in facing these challenges – we need to work together to solve these complex challenges.
SAP enables supplier due diligence processes with human rights risk assessments and insights integrated into procurement and contract workflows in SAP Ariba Supplier Risk. Supplier self-assessment questionnaires on human rights compliance are available to any supplier in the SAP Business Network as a one-to-many data exchange, and suppliers can freely share the questionnaire with buyers who request it. This builds confidence in human rights due diligence and saves time, effort, and costs for both suppliers and buyers.
SAP Environment, Health, and Safety Management (SAP EHS) enables critical interventions in areas such as occupational health and safety. SAP SuccessFactors solutions help build a diverse, equitable, and inclusive work environment and provide education and training to prepare people for the jobs of the future. SAP S/4HANA for product compliance can positively impact consumers and communities by ensuring safe products and services, including through human rights compliance in products and materials. These are just a few examples of how SAP technology can support your company's transformation to achieve a just transition to net zero and an inclusive green economy.
A comprehensive and interconnected business agenda
As we all move towards a more inclusive and interconnected business agenda, we must act to strengthen the “S” of ESG (Environmental, Social and Governance) – a key pillar of action that has long been overlooked. The report states:Tackling inequality: A business action planThe Business Commission on Inequality (BCTI), established by the World Business Council for Sustainable Development (WBCSD), Ten clear actions businesses can take to address growing inequality.
Tackling inequality is a key driver of long-term sustainable economic growth and many leading companies are already playing their part to level the playing field. Now it is up to all businesses to realise their full potential to avoid the risks posed by growing inequality and ensure equal opportunities and better outcomes for all.
Gitte Winther Bruhn is global head of social responsibility solutions at SAP.
*Source: “Tackling Inequality: A Business Action Agenda” by the Business Commission on Inequality (BCTI), established by the World Business Council for Sustainable Development (WBCSD). Published on May 3, 2023.
