Equity and the Private Sector
I’m working on a review of the U.S. adaptation field for a client – and a persistent theme keeps surfacing with the potential to change my work significantly. It’s the broken interface between equity and adaptation. The project is raising my awareness about an issue my corporate clients seem to give little more than lip service to: the inequality of climate risk.
Yet, I wonder if, perhaps, I just wasn’t hearing them properly.
Of course, the development community speaks of the disproportionate risk from climate change confronting the world’s poorest people. I have written before about their plight. And the World Bank’s Turn Down the Heat: Confronting the New Normal report, persuasively surmises that climate change will erode progress made on reducing poverty. It is sobering that over the past 30 years, one dollar of every three spent on development has been lost as a result of climate risk,. according to USAID and the Rockefeller Foundation.
Academics have come to similar conclusions. A joint Stanford-Berkley study reveals that in a climate-changed world. global incomes could be 23 percent lower by 2100.
We know that the long-term impact of lower incomes relates to shrinking global markets and, thus, has an impact on economies and the corporate sector worldwide.
But do corporations care about inequity? It’s a critical question since one of the key findings of this year’s World Economic Forum Global Risks Report, based on a global risk perception survey of over 1000 ‘educated elite,” is that inequality and “polarization” now rank among the top three as interconnected underlying trends influencing global risks.
I missed this finding while focusing on another pervasive trend – the importance of environmental risk – that the report demonstrates more clearly than ever. The report assesses 30 separate global risks divided into five categories: economic (blue), environmental (green), geopolitical, societal and technological. The pattern I detect is that economic risk impacts dominated earlier this century before environment risk impacts took its place more recently.
WEF’s Risk trends interconnections map illuminates that rising inequality has become the most important driver of global risks. “And the most important pairing of interconnected risks was that of unemployment and social instability,” It noted.
I put the question about corporations’ degree of care about inequality to a plenary of private sector leaders at ResCon recently and got a wide variety of responses. They ranged from “a rising tide lifts all boats” and “since the election, I’ve called a few meetings to discuss how we are helping or hurting social inequity” to “inequity is the largest challenge that cities face.”
WEF concludes that we need to “boost growth but also reform market capitalism to help to mend the increasingly pronounced fractures that can be seen in many societies.”
Reforming market capitalism is a bold statement – more apropos of a grassroots group – but, personally, I certainly am glad to have WEF on the case and eager to continue to pursue equity actions with my clients.