Advancing the Green Agenda requires addressing the severe social inequalities present today. Without community support and global social buy-in, the private sector cannot effectively drive progress on a Just Transition. As investor interest in social risks and the integration of environmental, social, and governance (ESG) criteria grows, it is crucial to support investors to be responsible corporate stewards.
A newly released research paper by the United Nations Development Programme (UNDP), which Rights CoLab’s Joanne Bauer contributed to, underscores how tackling socio-economic inequality can accelerate progress on the social transformation necessary to meet climate goals. The paper spurs action at policy and regulatory levels, offers recommendations for how the financial sector can direct capital into more sustainable economic activities, and outlines an agenda for researchers to explore how socio-economic inequality contributes to systemic financial risk.
The authors advocate that, to effectively integrate ESG criteria, regulators and policymakers should:
- Support research on inequality as an early indicator of financial crises, emphasizing the role of income and wealth disparities as potential destabilizing factors.
- Enhance social disclosure standards and develop more robust risk management tools.
- Reconsider the macroeconomic foundations of sustainable finance scenarios.
Read the report here.
Photo by aboodi vesakaran on Unsplash
