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A Plan B for global business
The ‘B Team’ feels capitalism needs to move to another model which serves people and planet better, says Rajni Bakshi.
Rising inequality of incomes and assets is in the news again and it seems to be worrying those at the centre-table of the global economy.
In January, Oxfam released a report which said that almost half of the world’s wealth is now owned by just one per cent of the population. Seven out of ten people live in countries where economic inequality has increased in the last 30 years.
In the first week of February the chief of the International Monetary Fund (IMF), Christine Lagarde, gave a lecture in which she pointed out that in the USA inequality is now back to levels which existed before the Great Depression of the 1930s. The richest one per cent of Americans have captured 95 per cent of all income gains since 2009, while the bottom 90 per cent got poorer.
No wonder, said Legarde, that inequality is increasingly on the global community’s radar – because it threatens to “tear the precious fabric that holds our society together”.
While the expression of these worries at the World Economic Forum got some attention, relatively less coverage was given to the solutions being proposed by the ‘B Team’, led by billionaire Richard Branson.
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A Plan B for global business
The idea that capitalism needs to move to another model which serves people and planet better has been promoted earlier by environmental and social activists. But the ‘B Team’ hopes to get a bit more traction, since most of its members are successful business leaders.
The ‘B Team’ positions itself as an alternative to the dominant model of commerce. Their premise is that while business has been improving people’s lives for centuries it is also driven by warped incentives. A statement issued by the group recently called for a new approach that has a longer-term horizon and is focused on helping people rather than maximizing profit at all cost.
At the very least, says the B Team, businesses should implement the UN’s Guiding Principles on Business and Human Rights – both in their core operations and also across their supply chain. This would mean decent working conditions, fair wages and stable communities. It also urges business to work with governments to strengthen governance and end corruption.
“Depletion of natural resources and excessive release of greenhouse gases also impact negatively on human rights and the wellbeing of people all over the world, especially those living in poverty” the statement goes on to say. “Business has an opportunity to explore alternatives that protect and restore ecosystems to ensure a healthier planet for all.”
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A Plan B for global business
Apart from Richard Branson, the founder of Virgin, the statement is signed by Shari Arison, an American-Isreali businesswoman who owns the Arison Group; Kathy Calvin, President of UN Foundation; Arianna Huffington, founder of the Huffington Post; Mo Ibrahim, founder of Celtel; Blake Mycoskie, founder of TOMS shoes; Paul Polman, CEO of Unilever and Professor Muhammad Yunus founder of Grameen Bank.
In essence the B Team is calling for the kind of changes which many international NGOs have called for over the years. Oxfam’s recently released report, ‘Working for the Few’, makes the following recommendations to businesses:
- Say no to tax havens and don’t dodge taxes either in your own country or where you invest and operate.
- Don’t buy political favors that undermine the democratic will of fellow citizens.
- Support progressive taxation on wealth and income.
- Challenge governments to use their tax revenue to provide universal healthcare, education and social protection for citizens.
- Insist that all companies in which you invest in, own or control pay living wages.
- Challenge other economic elites to join in these pledges.
- Push for stronger regulation of markets to promote sustainable and equitable growth.
- Remove the barriers to equal rights and opportunities for women.
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A Plan B for global business
The B Team’s strategy is to highlight the good work of a growing number of companies which already pay a living wage, involve poor people as employees and are looking to serve low-income consumers. It also celebrates those companies that are supporting sustainable farming, aquaculture, forestry or ecotourism, and investing in new biochemical, low-carbon concrete and steel, as well as clean energy and transport technologies.
But this is not enough, adds the B Team statement: “Many managers may be unaware of the side effects of their decisions, or lack incentives to address them. Education in new management practices can help, as well as the measurement of environmental and social impacts, improved governance and increased transparency.”
In the absence of such endeavors we cannot hope for a new era of peace, shared opportunity and ever-increasing interdependence. The opposite of this would be a prolonged period of strife.
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A Plan B for global business
That’s a powerful incentive to move away from single-minded financial short-termism and instead expand corporate accountability beyond financial gains to include a greater sense of responsibility for impacts on society and environment.
Paul Polman, chief executive of Unilever, and a member of the B Team put the challenge in a nutshell in a recent interview to the US public radio:
"Nine out of ten people in this world depend on businesses, and I think it's in all of our interests to create healthy institutions.
You cannot get a successful, healthy business model if you also don't create a healthy environment. Business has a hard time succeeding in societies that fail."