May 30 - It’s been 12 years since the Occupy movement, protesting the gross inequality of the capitalist system, started on Wall Street, inspiring copycat demonstrations across the U.S. and the rest of the world. But while the movement has long fizzled out, the slogan of its placard-waving young protesters, “We are the 99%”, carries weight to this day.

Inequality is not only still with us, but it has grown. According to calculations by Swiss bank Credit Suisse, 54% of the $127.5 trillion in new wealth created between 2012 and 2022 went to the world’s richest 1%. In contrast, a mere 0.7% went to the four billion people who comprise half of the global population, mostly in the Global South.

Now a group of more than 30 major corporations, including BP, Philip Morris, HSBC Asset Management, and Nestle, has presented a bold “agenda for business action”, arguing that growing inequality is bad for business.

Coordinated by the private sector-led World Business Council for Sustainable Development (WBCSD), the newly inaugurated Business Commission to Tackle Inequality (BCTI) also includes 30 or so additional members from civil society and business-related organisations, such as the B Team and We Mean Business.

Lynn Forester de Rothschild, founder of the Council for Inclusive Capitalism, is one of the BCTI’s seven co-chairs, along with Peter Bakker, chief executive of WBCSD, and the CEOs of Unilever, ITC, ManpowerGroup and Olam International.

The BCTI blueprint appears in a 131-page report released earlier this month. At its centre is a collection of 10 “catalytic actions” that the report’s authors say business could – and should – collectively adopt. If implemented in full, the measures would lay the foundations for a more inclusive form of capitalism, the report says.

Among the proposed actions are a commitment to make essential products and services more accessible and affordable, create a diverse and equitable workplace, provide safe work, upskill people for future careers and to support effective public policy.

“This is the first time a group of companies has come out with a report about what is inequality, why is it a systemic risk (and) what businesses should do about it,” says Bakker.

By the report’s own reckoning, the private fortunes of the richest 10 individuals (all men) on the planet, amount to more than the total wealth of the world’s poorest three billion people put together.

Such discrepancies come with a huge cost. Nearly one in five (19%) workers worldwide don’t earn enough to adequately feed or house themselves of their families. More startlingly still, ill-health, hunger and other issues linked to inequality, lead to an avoidable death every four seconds.

Aside from the humanitarian tragedy of such realities, the cost of inequality constrains economic growth and undermines the world’s capacity to address existential global threats such as climate change and biodiversity loss, the report adds.

The verdict of BCTI’s member companies is unambiguous: “The high level and structural nature of inequality today make it an urgent systemic risk – one that is threatening not only individual communities or companies, but entire societies and economies.”

And they don’t hold back in pointing out how irresponsible business practices, such as paying low wages, workplace discrimination and unfairly pressurising suppliers, are exacerbating the inequality gap.

Emma Cox, global climate leader at professional services firm PwC, points to the business opportunities from a more inclusive economy, including new “green collar” jobs in low-carbon industries such as renewable energy and clean technology.

“People are at the heart of the transition to a net-zero, nature-positive economy and so we need to think how to create prosperity, growth and better jobs for them in this new, more sustainable, economy”.

The creation of products and services specifically for customers in developing economies, something that Dartmouth College business professors Vijay Govindarajan and Chris Trimble have coined “reverse innovation”, fits a similar logic. Take banking. According to the BCTI report, the revenue potential from providing financial services to individuals and enterprises currently without a bank account is estimated at around $380 billion per year.

In addition to the direct benefits for hitherto excluded groups of being able to access low-cost solutions in vital areas such as healthcare, education and energy, the insights gained from the process can also be used to enhance a company’s offer in existing markets.

India is home to a plethora of such examples. Korean electronics giant Samsung is investing in a large-scale research and development centre in the tech-hub of Bangalore, where researchers have registered more than 7,500 patents over the last four years.

Yet, equality advocates strike a more cautious note. Anti-poverty charity Oxfam is typical in welcoming the recognition by big business of inequality as a systemic risk, but questioning whether the BCTI blueprint addresses the root cause of today’s inequality gap.

Irit Tamir, director of Oxfam America's private sector department, notes that the report remains evasive on business-as-usual practices such as share buy-back schemes and excessive executive pay.

“We have now got a model (of business) that is so focused on the short term and shareholder primacy that we have stripped the ability of any other stakeholder to hold companies accountable … corporations are now just wandering the world to exploit labour and resources.”

Alex Cobham, chief executive of The Tax Justice Network (TJN), a UK-based advocacy group, says opposition to corporate tax abuse is “always welcome”, but the report’s recommendations do not go far enough.

With corporate tax abuse costing societies around the world hundreds of billions of dollars in lost revenues each year, he says, it would be more credible and effective for companies to both voluntarily promote “meaningful transparency” of their own tax practices, and lobby lawmakers to make transparency mandatory across the private sector. This will soon be the case in Australia, under new rules for country-by-country tax disclosure for multinational companies.

Another litmus test for big business’s assault on inequality will be future attitudes towards worker representation. Freedom of association has become a heated battleground around the world, with the number of workers covered by collective bargaining falling from 46% in 1985 to 32% in 2017, according to the Organisation for Economic Co-Operation and Development (OECD).

Unionisation has become particularly contentious in the United States in recent decades. As Princeton sociologist Matthew Desmond notes in his recent bestselling book, Poverty, by America, 94% of private-sector workers in the world’s largest economy are without a union. Of these, half would organise if given a chance.

“Employers have at their disposal an arsenal of tactics designed to prevent collective bargaining, from hiring union-busting firms to telling employees that they could lose their jobs if they vote yes,” he writes.

So will business take on board the BTIC’s blueprint and act decisively to counter inequality? Oxfam’s Tamir is doubtful. She notes as “ironic” the involvement of e-retail giant Amazon in the report. At its annual general meeting this month the board for a third time rejected a shareholder resolution for an hourly worker to be added to its board, to amplify the voices of workers across the company.

WBCSD’s Bakker is more confident. While he concedes that the blueprint is “just a starting point”, he insists that the appetite for action among progressive businesses is high. As metrics for measuring companies’ social impacts improve, he adds, so too will the capacity to hold companies to account.

“Inequality is not a fact of life, but it’s a fact of the economic system as we currently operate it,” he states. “As the action agenda builds, in parallel with the development of better accountability metrics, so the transformation of our current system will speed up.”

Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. Ethical Corporation Magazine, a part of Reuters Professional, is owned by Thomson Reuters and operates independently of Reuters News.