2022-05-17-KPMG_Global-Social_inequality_as_a_business_risk_22页_1mb

Social Inequality as a Business Risk

Overview

• Social inequality poses significant business risks amplified by rising wealth disparity, declining trust in governments, the climate crisis, and geopolitical tensions. This KPMG report urges collective action for businesses to transform towards purpose-driven organization to mitigate these risks.

Key Findings

1. Problem

• Widening Inequality: Disproportionate COVID-19 impacts increased poverty and 'learning poverty'. Wealth distribution is extreme (8 richest own as much as the poorest half of humanity). Traditional economic models often overlooked societal needs.
• Declining Trust & Unrest: Erosion of trust in governments fuels social and economic risks. Violent social unrest directly impacts businesses economically, socially, and politically, hindering investment, sales, and operations.

2. Corporate Imperatives & Action

• Legal Imperative: Businesses must adhere to ESG regulations (human rights, supply chain due diligence) to avoid reputational damage, investment loss, and potential legal penalties.
• Moral Imperative: Businesses must address societal issues ethically (climate, human rights, discrimination) to align with stakeholder expectations reflected in frameworks like UN SDGs and ESG.
• Economic Imperative: Prioritizing equality can boost productivity, stimulate demand, create resilient supply chains, and attract/retain talent. High inequality hinders economic growth and limits market potential.

3. Required Action - Transformation

• Define Inequality: Recognize the forms, drivers (past/different generations), and consequences of inequality (outcomes vs. opportunities).
• Act: Transform organizations, foster inclusive cultures, measure social impact, collaborate broadly, and proactively engage with stakeholders to address inequality.