SDG #10: Reduce inequality within and among countries | Strategic Risk | Deloitte

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SDG #10: Reduce inequality within and among countries

Sustainable Development Goals Blog Series

On January 1st, 2016, the 17 Sustainable Development Goals (SDGs) of the 2030 Agenda for Sustainable Development officially came into force. Over the next 15 years, with these 17 goals, countries will combine efforts to end all forms of poverty, fight inequalities and tackle climate change. In this article we aim to familiarize you with SDG #10: Reduce inequality within and among countries and what actions your organization can take to achieve this goal.

By Jasmijn Korver and Jennifer Muller| 13-11-2017

What?

SDG 10 focuses on reducing inequalities within and among countries. When it comes to reducing inequality among countries, the least developed countries and most vulnerable nations continue to make inroads into poverty reductions. However, inequality still persists and large differences in accessibility to services like health and education remain. In fact, while income inequality among countries have been reduced, inequality within countries has risen.To counter this, we should not just look at governments and plea for effective policies but acknowledge that businesses have a key role as well. In order to start to understand the impact businesses have on achieving this goal and how organizations benefit in return we have written this blog. We hope it can provide you with some new insight and inspiration!

Why?

A 2015 survey of business leaders showed that SDG 10 ranks low on the corporate agenda compared to the other SDGs, meaning that when firms cherry-pick SDGs, improving equality is not the most chosen SDG. In our eyes this is unfairly so, as working towards SDG 10 can offer companies not only social but economic opportunities as well. Furthermore there are regulatory and societal pressures making it worth considering, or even wise from a risk perspective, for businesses to start thinking and acting on this topic.

(Income) equality is an issue that has become a growing concern in society. Not in the least driven by the millennial generation. They rank this topic as one of the most pressing market fears, as Deloitte’s millennial survey shows.2

The topic of inequality is often being discussed in societal, and regulatory spheres. The various regulations on diversity and equality are exemplary of this. One example of regulation is the quota law, obligating companies with more than 25 people to hire a certain percentage of employees with a distance to the labor market, and the action plan for labor discrimination.3 Additionally, the EU-directive for non-financial information, which came into force in 2017, obligates larger companies to report on diversity in the board. By introduction of the comply or explain regulation companies risk both reputation damage if not adequately explained or fines if not explained at all. Both acting as incentives for companies to address the topic of equality seriously.

From a more positive perspective, businesses can use this topic to stand out from their peers and boost reputation. As so few companies have publically embraced this topic there is still potential to become a front runner for example by acting ahead of anticipated regulation like a quota law for female board members, which is discussed frequently.

The commercial benefits connected to SDG 10 vary greatly. For instance having an equal and diverse workforce is known to increase innovation because of the different perspectives being raised. Also, since the millennial generations view this topic as important, solid actions and effective communication regarding the companies efforts to reduce inequality enhances employer attractiveness. Finally commercial benefits can be found in the possibilities to open up new markets.

How?

Below three examples are mentioned of actions that businesses can take.

Invest in new markets and customer groups

In the plan of creating more equality, new markets could be discovered that could offer new business opportunities. An example of this is investing in the health market in emerging countries, e.g. by investing in new technologies or medicine. This gives the emerging markets opportunities to grow, and offers with this possibilities to decrease inequality. Additionally, businesses will create new commercial opportunities with this, e.g. by creating a new customer or investor group.

Not only market types, but also new customer groups could be engaged that are commercially beneficial. An example of this is given by the World Economic Forum: they indicate it is worthwhile to invest more in the LGBT community. Not only is the LGBT market estimated to be worth more than 3 trillion dollar, it is also being recognized as a powerful market force. Furthermore, with research showing that LBGT customers are often loyal to a brand when it’s LGBT supportive, this creates opportunities for customer loyalty.4

Offer equal opportunities to your own workforce

The second action which is in the power of the company itself is to offer equal opportunities to its own workforce and with that, stimulate diversity. Research has shown that companies in the top quartile for gender diversity are 15% more likely to have returns above the industry median. For ethnical diversity, the companies are even 35% more likely to outperform the companies in the bottom quartile.5

Equal opportunities does not only mean being open and transparent about selection criteria and salary but can also be created by showing true flexibility towards work schedules. And by making sure that people using flexible schedules are not impacted financially which unfortunately still is the case today, especially for women.6

Creating equality through (technological) product and service offering

Product and services offering companies can sometimes use their own products to increase equality and at the same time, contribute to the economy and their own market.

For example, the technology sector has increased the lives of many people in vulnerable situations by offering them possibilities to participate in society via among others e-health options, digital learning possibilities and online financial services like banking. The provision of the basic services through the digital platforms and the internet of things can especially have an impact on low-income or undeveloped countries, but also offers vulnerable people and people in a difficult financial situation in developed countries can benefit from those services and products.7 Developing and offering those type of products contribute to equality, and are also a new market source for businesses, which fits the statement earlier this article.

In short although SDG 10 might at first sight not be the cherry you pick from the SDG fruit basket, we hope we have inspired you to reconsider, deliberate, discuss and decide.

Sustainable Development Goals Blog Series

This blog is part of the Sustainable Development Blog Series: a blog series that highlights the 17 SDGs one by one on a biweekly basis. In these blogs you will find more information about each SDG, why it is important for your organisation to contribute to the achievement of it, and specific examples of how you can do that.

More information?

For more information about the Sustainable Development Goals and what your organisation can do to contribute, please contact Anne Huibrechtse-Truijens via ahuibrechtse@deloitte.nl / +31882882071

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