As the corporate elite meet in Davos, it’s time for a new agenda.
The news leading up to this week’s World Economic Forum has been sobering. Global carbon emissions hit an all-time high last year. The wealth gap between the poor and the global elite continues to grow. Meanwhile, political crises and closing civic space threaten democratic freedoms around the world.
And that’s not to mention disappointing progress on the UN’s Sustainable Development Goals (SDGs) with the lackluster engagement and financial investment of the private sector. The world won’t solve hunger or course correct on climate change if companies only tweak their sustainability agendas at the margins.
So what should be on their priority list for 2019? Here are four sustainable business trends (Oxfam-style) for companies thinking about their priorities for this year and beyond.
1. Tackling inequality—an existential challenge
Rising inequality has remained the elephant in the room. As compared with corporate action on climate change, rising inequality is seen as a social problem, not a business one. For this reason it has remained at the fringes of most companies’ sustainability agendas (including business’ engagement in the SDGs). And societies around the world are paying the price.
In 2019 companies should help tackle inequality and address how they shape the ways in which income and wealth are distributed. This includes taking a hard look at the growing monopolization of many industry sectors; spiraling CEO compensation as wages stagnate; corporate tax abuse; squeezed suppliers and supply chain workers; and disparities in power and income among men and women workers and leaders.
2. Elevating the political responsibility of business
Rising inequality is one reason why we are seeing the current wave of political turmoil, social polarization, rising right-wing populism and the erosion of democratic freedoms. Popular trust in institutional actors—be it business, the media or government—is at a record low in many countries, particularly the US (see graph below).
Companies should strengthen the political orientation of their approach to sustainability and adopt a more principled commitment to democratic freedoms and human rights. We saw promising signs in 2018 of companies recognizing the business case for human rights and civic space. Yet we are a long way from companies ‘talking the walk’ as many fail to align their political activities with their sustainability ambitions.
3. Shifting attention to emerging markets
The future is increasingly being written in emerging markets, such as China, India, Brazil, or Nigeria. By 2025, these countries are expected to host almost half of the Fortune Global 500 (up from 23 in 2000) and the vast majority of the world’s population. Their rise offers unprecedented sustainability challenges and opportunities given their growing populations, insufficient job opportunities, as well as significant political, social, and environmental challenges.
In 2019 companies in emerging markets need to respond to these challenges—including providing decent work, supporting domestic resource mobilization for development (e.g. through tax payments), preventing and managing climate change impacts, and protecting civic space. Ultimately, emerging market companies will pioneer the technological and business model innovations that we need for a sustainable future.
4. Accelerating the conversation around the transformation of our economic model
A call for more transformative ideas about the future of our economic system will figure prominently in 2019. These calls are fueled by popular frustration and underpinned by well-founded critiques of the shareholder-first economic model and stinging rebukes of sustainability efforts driven by large companies and wealthy individuals.
Conversations about the future of business should accelerate in 2019. They should include unconventional allies in support of a new corporate paradigm for investors and business leaders. And it should promote viable alternatives to the status quo including legislative proposals and alternative corporate structures.
Look out for these sustainable business trends and let’s create a more equitable and sustainable economy in 2019.
What do you think of this alternative agenda? Agree? Disagree? Tweet us at @OxfamAmerica with your comments and views.