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How business leadership can advance
Goal 10 on Reduced Inequalities

Equality is fundamental to a stable, just, prosperous, and peaceful society. In
recent years, the benefits of economic growth have disproportionately favoured
the world’s richest. In OECD countries, income inequality is at its highest levelin the past half century. In developing countries, it has increased by 11 percent between 1990 and 2010. Further, while there has been a narrowing in the
average incomes between developed countries and some developing countries,
average incomes in other developing countries have fallen further behindthose in developed countries. Many groups, such as women, racial minorities
and indigenous populations, still do not have equal access to opportunities facing exclusion from business ownership and corporate decision making anddiscrimination related to wages, employment, and access to financial services.
Intergenerational inequality is also a critical challenge – ensuring that future
generations do not inherit a far-more polluted planet.

Contrary to the perception of many businesses, the private sector has a crucialrole to play in addressing the systemic challenge of reducing inequality. Business
impacts inequality through the decisions it takes on how to distribute theeconomic value it generates, including by deciding whether it pays living wages
and how it structures executive pay; by paying or not paying taxes (in different
countries) that are essential for funding inequality-reducing social security andpublic investment in health, education, and infrastructure; through the way it uses
its economic and political influence to shape the marketplace and its regulatoryenvironment. At the same time, the systemic challenges underpinning attainmentof this Goal illustrate the need for collaborative action bringing together all
stakeholders, especially Governments. In support of these collective efforts,
all companies should pay their fair share of taxes, practice non-discrimination,comply with social and environmental regulation, and respect and support humanrights. Responsible tax practice also involves progressive alignment of economic
activities and tax liabilities (tax planning), country-by-country reporting on
tax-relevant information, and transparent and responsible engagement with tax
authorities.

Leadership takes these activities further. Leading companies can assess
how they impact the distribution of economic value across stakeholder
groups and implement policies and practices to make it more equal.
They can support the establishment and expansion of social protection
measures at the national level, where they may complement government
efforts with their expertise and resources. Business can lead through theimplementation of policies and practices to support equality of opportunity,
treatment, and outcome for all across own and supply chain operations, andit can have a leading impact on the reduction of inequality through design
and implementation of products, services, and business models that target
the needs of vulnerable and marginalized populations.
Reducing inequalities benefits businesses as it helps create a more stable andpredictable business environment. It also introduces greater diversity of thought
into the workplace, boosting innovation and profitability. Economic researchshows that reducing income inequality boosts economic growth.

Action on Goal 10 is deeply linked to other Goals. Reducing inequalities cancontribute to peace-building efforts (Goal 16), improve the condition of women(Goal 5), and foster stronger and more sustainable economic growth (Goal 8),
which can in turn, help reduce poverty (Goal 1), hunger (Goal 2), and lack of accessto education (Goal 4).

Definitions: equality of opportunity means equality of access and life chances;equality of treatment means equality in how people are treated in day-to-day
affairs and zero discrimination based on sex, race, gender and other non-work
related characteristics; equality of outcome is equality of income and wealth.

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Business Actions in Support of Goal 10

Targets of Goal 10

Business Actions

10.1 A chieve and sustain income growth of the bottom 40 per cent of
the population at a rate higher than the national average1
10.2 E mpower and promote the social, economic and politicalinclusion of all, respective of age, sex, disability, race, ethnicity,
origin, religion or economic or other statuses

10.3 E
 nsure equality opportunity and reduce inequalitiesof outcome

10.4 A dopt policies, especially fiscal, wage and social protection
policies, and progressively achieve
greater equality

2

3

10.5 I mprove the regulation and monitoring of global financial markets
and institutions and strengthen the implementation of such
regulations4
10.6 Ensure enhanced representation and voice for developing
countries in decision-making in global international economic andfinancial institutions in order to deliver more effective, credible,
accountable and legitimate institutions

10.7 Facilitate orderly, safe, regular and responsible migration andmobility of people, including throughthe implementation of planned and well-managed migration
policies

Assess the distribution of economic
value across stakeholder groups andimplement policies and practices tomake it more equal
Support the establishment andexpansion of social protection
measures at the national level
Implement policies and practices
to support equality of opportunity,
treatment and outcome for all acrossown and supply chain operations
Design and implement products,
services, and business models
that explicitly target the needs of
disadvantaged and marginalized
populations

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Do your actions satisfy the Leadership Qualities?

Guiding
Questions
to apply to the
Leadership
Qualities to yourbusiness

Intentional

Ambitious

Consistent

Collaborative

Accountable• Is your company
committed to supporting
the achievement ofGoal 10? Have you
developed a holistic
strategy that reflects
this commitment,
covering end-to-end
operations and the wider
community?

• Do your actions achieve
long-term outcomes that
greatly exceed thoseresulting from current
industry practice?

• Is support for Goal 10
embedded across allorganizational functions?

• Do you proactively
look for opportunities
to partner with
Governments, UN
agencies, suppliers, civilsociety organizations,industry peers and otherstakeholders to inform
how to advance Goal 10?

• Do you publicly express
your commitment toadvance Goal 10?

• Are your actions alignedwith what is needed toachieve Goal 10?

• Are staff and board
incentives aligned withachieving Goal 10?

• Are you committed
to learn from youractions and do you
have processes inplace to improve themaccordingly?

Key
Considerations
for Goal 10• Do you mitigate risks
associated with youraction?
• Do you remediate
negative impacts
associated with thisaction?
• Do you engage
stakeholders in ameaningful way?

• Is your strategy
supported by the highest
levels of management,
including the Board of
Directors?

Addressing inequalities
may require action that
implies a reductionin profitability in the
short term. Top-level
leadership and a strategic
commitment are needed
to successfully drive
such action, and explain
results to others.

• Do you identify, monitor,
and report on impacts,
including potentiallyadverse impacts?

Addressing inequalities
may require action that
implies a reductionin profitability in the
short term. Top-level
leadership and a strategic
commitment are needed
to successfully drive suchaction, and explain results
to others.

Action on inequality
should be consistently
backed by all
departments, especiallywhere they concernchanging internal andsupply chain policies
and practices (including
related to adequate
wages and pay gaps),
and where intensive
collaboration with
Governments and otherstakeholders are involved.

Inequalities are often
due to systemic issues
that cannot be addressedby one company alone.
Collaboration, especiallyin multi-stakeholder
partnerships including
Governments, is key tosuccessful delivery on thecompany’s goals.

Companies should
identify stakeholders
that are most vulnerable
to economic and social
inequalities on which theiraction can have an impact,find ways to integrate
their perspectives into
actions, and be publicly
accountable for outcomes– both positive andnegative.

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How taking action on Goal 10
is interconnected with other Goals

The Global Goals are inherently interconnected. Action taken toward one Goal can support or hinder the achievement of others. Identifying andaddressing these interconnections will help business to build holistic and systemic solutions that amplify progress and minimize negative impacts.
To help build a greater understanding, we have illustrated some of the ways in which the Goals connect. These are not exhaustive, and we encouragebusiness to consider how they apply in their own operations.business to consider how they apply in their own operations.

Maximise likelihood of positive impact on:
Action to reduce inequalities is deeply linked to other Goals. Reducing
inequalities contributes directly towards greater levels of gender equality(Goal 5). It also helps build more stable and peaceful economies (Goal16) by abating the social tensions that emanate from inequality. Evidenceshows that reduced inequality fosters stronger and more sustainableeconomic growth (Goal 8) because it helps unlock the population’s
working potential, increases diversity of thought, and creates a morestable environment for businesses. This in turn helps reduce poverty (Goal1), hunger (Goal 2), ill-health (Goal 3), and lack of access to education(Goal 4). A reduction in inequality can also benefit planet-related Goals
indirectly. For example, bringing marginalised communities into the formal
economy can reduce their dependence on activities that are harmful forthe environment such as logging and illegal poaching.

Minimise risk of negative impact on:
In the short term there is a risk that efforts to decrease inequality
contribute to environmental degradation. For example, increasing
equality of access to energy resources using fossil fuel sources power
can negatively affect efforts to combat climate change (Goal 13). For
long-term success, action to reduce inequality should respect theenvironment. This will also contribute to inter-generational equity.

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BUSINESS ACTION 1
Assess the distribution of economic value acrossstakeholder groups and implement policies andpractices to make it more equal
Companies create economic value and distribute this to different stakeholders.
All companies should recognize that shareholders are only one group, and thatthe interests of other stakeholders – and sustainable development more broadly– may need to be prioritized over short-term maximization of shareholder value.
Responsible shareholders, in turn, recognize and act on the understanding that
long-term maximization of returns may imply lower returns in the short term.
Leading companies can critically assess the distribution of the economic valuethat they generate across stakeholder groups including employees (including
in relation to adequate wages and pay gaps), investors, government, andcommunities, using the highest reporting standards for this purpose. Companies
can use this information to distribute value more equally. This may be achieved
through changing ownership structures to include communities and small
suppliers, or distributing profits above a certain threshold to community andenvironmental benefit funds. Leading companies can also identify and include
businesses in their value chain that distribute greater value to workers andcommunities, including suppliers with profit sharing agreements with workers,
hybrid ownership models that give workers or suppliers a share of the business, orgovernance models that give greater representation to workers and communities.

Example practice• A co-operative retail group which sells food, financial services and otherproducts applies GRI standard 201 to understand its economic value
distribution. This leads to several initiatives including significantly increasing
sourcing of local meat, produce, and dairy from local farmers; and a membership
scheme through which it returns value to its members and local communities. It
is also recognized as abiding by a high standard of responsible tax practice andtransparency• A financial services firm undertakes an objective gender pay gap audit by aqualified external party, publicly reports on the results and takes robust remedialaction to ensure jobs of equal value are remunerated equally• A consumer goods company allows an NGO to undertake a thorough assessmentof one of its overseas factories to assess the distribution of economic value
across workers; it publicly publishes the findings and works towards addressing
the systemic issues that are at the heart of unequal distribution• A chocolate company has an ownership structure which allows forco-ownership by smallholder farmers; it ensures that farmers get a sharein the profits and a voice in company decisions; it also guarantees aminimum Fairtrade price to protect farmers from the volatility of the market• A Scandinavian company has an employee-owned structure which distributes
profits fairly amongst workers; it puts a cap on executive pay, ensuringthat compensation is fair and, proportionate to experience and contribution• A global food producer works to strengthen women smallholder farmers’
linkages with market actors, thus helping to improve equity in societal
relationships• A food company tracks five domains of empowerment, that is, production,
resources, income, autonomy and leadership for employees acrossits business to assess whether action to further equality is effective. It takes
robust remedial action in cases where inequality problems are found• A US consumer goods company becomes a certified benefit corporationin order to align its mission to generate social value through its hiring,products and operations with its legal status. By doing so, the company’ssocial goals and accountability to all stakeholders are legally protected,
alongside obligations to shareholders

Consider the leadership qualities andinterconnectedness of your action, including…
Intentionality: value distribution is a key area for decision making ofexecutive management and most corporate governance structures
include a board that holds management to account for its performance.
Intentionality behind the commitment to address inequality must be
ingrained in, and thereby enabled by, the governance structure. This
allows management to explain its long-term value creation strategy to all
stakeholders and act on it with full support.
Interconnectedness: a more equal distribution of value can support allof the Goals. It can directly impact incomes of people (Goal 1) and, throughapplying a gender lens, increase gender equality (Goal 5). It can indirectly
allow other stakeholders including government, businesses, and local
communities to take better care of themselves (Goals 2, 3, 4 and 6) and bebetter stewards of the planet (Goal 11, 12, 13, 14, 15).

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BUSINESS ACTION 2
Support the establishment and expansion of social
protection measures at the national level
Business is obliged to respect applicable laws regarding taxation and othercontributions to social protections.These include tax evasion and avoidance;
temporary, zero hour, and part time contracting; and paying salaries below living
wages. However, leading business also engages proactively with governmentand other stakeholders to consider how legal reform can contribute to greatersocial equality at local, national and international levels. Leadership supports
Governments in the establishment and expansion of social protection measures
for the betterment of vulnerable and marginalized groups. This can include
adopting responsible taxation, including transparency, practices; establishing
global minimum standards for living wages and benefits for employees acrossend-to-end operations that can be adopted at the national level; and advocating forsocial reforms that contribute to equality, including through living wage reforms
and provision for unemployment. Companies should be careful to complement and
not undermine existing social protection initiatives by Governments.

Example practice• A tax advisory company establishes an initiative involving a wide range of
relevant stakeholders, including taxpayers, academia, media, government, global
bodies, politicians, NGOs and tax professionals, to inform thinking on what
responsible tax behavior in a global context requires• A utility gets accredited by a not-for-profit organisation that certifies companies
for responsible taxation practices and tax transparency. Along with othercertified companies, it actively advances the mission of the initiative by callingon government to put responsible taxation at the heart of its policy
agenda• A consumer goods company works with labour unions to implement a living
wage throughout its supply chain, as well as ensuring collective bargaining
and Freedom of Association for all employees• A garment company participates in a global framework agreement withinternational brands, retailers, manufacturers, and trade unions to address theissue of living wages in the textile and garment supply chain• A consumer goods company reviews its hiring practices to ensure that any hiringof workers on temporary or short-term contracts happens only when essential,
due to seasonal changes and not to avoid social benefits regulations

Consider the leadership qualities andinterconnectedness of your action, including…
Accountability: companies should meaningfully engage with all
stakeholders to best understand how they can take effective actionthat does not in any way countervail existing initiatives, and, instead,complement themInterconnectedness: social protection can help advance all
people-focused sdgs, including no poverty (Goal 1), zero hunger (Goal2), health and well-being (Goal 3), quality education (Goal 4), and genderequality (Goal 5).

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BUSINESS ACTION 3
Implement policies and practices to support equality ofopportunity, treatment, and outcome for all across own
and supply chain operations
Companies have a responsibility to adopt policies and practices in supportof equality of opportunity, treatment, and outcome for their own employees.
Leading companies extend their action to their supply chain and work with
suppliers to do the same. Leading action on equality of opportunity can include
working in own operations and with suppliers to provide opportunities for groups
that have historically been discriminated. Equality of treatment can be promoted
through the supply chain by building capacity for implementing and enforcing
policies and practices to ensure non-discrimination such as recruitment,
promotions, accessibility of the workplace, the quality of work that is offered,and addressing unconscious biases against certain groups. Including thesefactors in performance reviews can embed the practice. Equality of outcome
can be supported with leading action to ensure businesses in the supply
chain follow the principle of equal pay for equal work, for example helping toinstitute processes that ensure objective, merit-based pay. In relation to rapidly
increasing data use and analysis, leading companies can set standards onreviewing use and protection of personal data and scrutinizing the processes
and algorithms through which judgments are made that allow people access to
products and services, to ensure that implicit biases in the data and its usage do
not reinforce socio-economic inequalities within societies.

Example practice• A consultancy implements training workshops to help build suppliers’
capacity to identify and rectify instances of wage discrimination andunfair treatment• A large accountancy firm takes action to include members of the LGBT
community by offering benefits such as spousal equivalent recognition andgender transition coverage, and by raising awareness of inequities that LGBT
professional face in the workplace. It also supports LGBT organisations throughsponsorship, volunteering and board involvement• A electric utility company, partners with an NGO to empower semi-literate
women from electricity deprived villages to install and maintain small
photovoltaic systems. This partnership develops the capacities of women
entrepreneurs by providing them with technical training• An international beverage company has a dedicated program that provides
targeted professional and personal growth opportunities to people withdisabilities through training, education, community events, networking etc. toensure equality of opportunity• A company reviews its use of big data to approve customers for store credit cards
to identify whether the processes used are reinforcing the economic exclusion ofvulnerable groups due to biases embedded in credit score rating methods

Consider the leadership qualities andinterconnectedness of your action, including…
Ambition: ambitious action aims to address inequality issues for the
long-term, which in many instances requires fundamental shifts in corporate
cultures. This ambition must be driven from the top to be effective
Accountability: not all inequalities are at the surface. Meaningful
engagement with stakeholders is often required to understand areas ofneed. Monitoring and reporting on inequality across own and supply chain
operations can also help direct action to address inequality and hold thecompany publicly to accountInterconnectedness: action on addressing inequality across own andsupply operations can advance all Goals where empowerment is a key driverof progress, including no poverty (Goal 1), zero hunger (Goal 2), health andwell-being (Goal 3), quality education (Goal 4), and gender equality (Goal 5).

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BUSINESS ACTION 4
Design and implement products, services, and businessmodels that explicitly target the needs of disadvantaged
and marginalized populations
Companies can lead by leveraging their innovation capabilities to create
products, services, and business models that cater to the need of disadvantaged
and marginalized populations. Products and services tailored for these groups
can significantly alter their conditions and allow them to live healthy, fulfilling
lives. New business models may be required in order to reach those groups withproducts and services. Examples include creating new, cheaper, and significantly
improved technologies for everyday use in impoverished communities such as
shelter, cooking, lighting, transport, and mobile telephony. Services and businessmodels can include financial services for farmers, including microfinance andcrop insurance.

Example practice• A start-up in develops feminine sanitary products that are sold at low pricepoints to increase affordability and help a greater proportion of women conduct
activities as normal while menstruating. It hires street vendors to distributeits products across packed urban settlements• A bank designs micro-loans with soft pay-back conditions, and mobile-banking
apps to reach unbanked communities in rural Bangladesh. It collaborates
with regional authorities to help increase the penetration of ID cards so that
customers can easily verify their identity and access financial services• A consumers goods company designs a low-cost fridge with sufficient
functionality that the urban poor do not suffer from food-related health issues
during summer• A bank in Brazil uses floating branches inside ships that travel rivers in aneffort to reduce inequality of access to financial services. During the visits
to communities, staff hold meetings to increase financial education

Consider the leadership qualities andinterconnectedness of your action, including…
Accountability: in designing products or services for vulnerable groups
its important to consult them in order to understand their needs andperspectives. These products and services, just as any others, should bemanufactured and delivered through supply chains that embed respect forhuman rights, such that products that help one vulnerable group do not doso based on the exploitation of another.
Interconnectedness: products, services, and business models that
address inequality can advance all Goals where empowerment is a key
driver of progress, including no poverty (Goal 1), zero hunger (Goal 2), healthand well-being (Goal 3), quality education (Goal 4), and gender equality (Goal5).

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References
SDG Compass
UN Global Compact Industry Matrix
Global Opportunity Explorer
Navigating the Goals: a business guide to engaging with the UN Global Goals
SDG Reporting - An Analysis of the Goals and Targets
Sustainable Development Knowledge Platform SDG 10
ILO Social Protection Platform
GRI 201: Economic Performance102