Inequality acts as a threat multiplier, fueled by crises ranging from pandemics to climate change. It is a systemic risk threatening the political and economic fundamentals that businesses depend on to operate, innovate, and grow. Businesses have powerful levers at their disposal – as well as powerful reasons to use them. We need to manage people impact with the same attention we manage carbon.
At a time when the wealthiest 10% of the global population earns more than half of the world’s income* and when only a handful of countries have the right conditions in place for genuine upward mobility, people are losing faith that the political and economic systems businesses depend on will deliver for them and their families.
The Panel on Climate Change (IPCC) is unequivocal that inequities linked to gender, ethnicity, income, and other factors increase vulnerability to climate risks and impacts. It also calls for action to tackle inequality as a key lever in achieving climate resilience and adaptation.
Companies have powerful levers at their disposal to be part of this critical effort – and meaningful reasons to use them.
There is a profound business case for a holistic and interconnected agenda to mitigate both the systemic and business risks created by inequality. Tackling inequality in the corporate value chain is a journey that all companies must begin, creating a ripple effect for positive impact.
- Mitigate: To prevent and minimize negative impact, it is necessary to stay ahead of regulatory change by implementing the UN Guiding Principles on Business and Human Rights. Start with your own operations and build robust corporate governance to reinforce and support commitments and practices. Then, expand the scope up- and downstream.
- Remediate: Build needed capacity, trust, and accountability across the value chain and drive positive output. Mobilize resources and measure and disclose responsible business practices.
- Advance: Promote social equity and gender equality. Extend the scope to n-tier suppliers and workers in the value chain and track measures of effectiveness for positive outcome and informed decisions, securing license to operate by building trust amongst employees, consumers, and society at large.
You Are Not Alone
Global obligations are not easily managed. Regulations are complex, increasing in severity, and varying by market. Data is distributed across multiple systems and is largely a manual effort to collect and process, and there is often a lack of insight to support collaboration between stakeholders towards equality.
Your business is not alone in facing these challenges. We need to work collectively to solve these complex challenges.
SAP can enable your supplier due diligence processes with human rights risk assessment and insights integrated into sourcing and contract workflows in SAP Ariba Supplier Risk. The supplier self-assessment questionnaire on human rights compliance is available for any supplier in SAP Business Network as a one-to-many data exchange in which a supplier can freely share the questionnaire with any buyer that requests it. This helps build trust in human rights due diligence and can lower time, effort, and cost for both supplier and buyer.
SAP Environment, Health, and Safety Management (SAP EHS) can enable critical interventions in areas such as occupational safety and health. SAP SuccessFactors solutions can support the creation of a diverse, equitable, and inclusive workplace and provide education and training to help prepare people for the future of work. SAP S/4HANA for product compliance can positively impact consumers and the community by securing safe products and services, for example, via product and material compliance with human rights. These are just a few examples of how SAP technology can support your company’s transformation to realize a just transition to a net-zero and inclusive green economy.
Holistic and Interconnected Business Agenda
We are all on a journey towards a holistic and interconnected business agenda, and we must act to reinforce the “S” in ESG (environment, social, and governance) – a critical pillar of action that has been overlooked for too long. In the report “Tackling Inequality: An Agenda for Business Action,” the Business Commission to Tackle Inequality (BCTI) set up by World Business Council for Sustainable Development (WBCSD) presents 10 clear actions that companies can take to address mounting inequality.
Tackling inequality is an important driver for long-term, sustainable economic growth and many leading companies are already embracing this role by working to level the playing field. The call to action now is for all businesses to maximize their potential to head off the risks posed by mounting inequality and ensure that equal opportunities and better outcomes are available for all.
Gitte Winther Bruhn is global head of Social Responsibility Solutions at SAP.
*Source: “Tackling Inequality: An Agenda for Business Action” by The Business Commission to Tackle Inequality (BCTI) set up by World Business Council for Sustainable Development (WBCSD). Published May 3, 2023.