The private sector is a major driver of socioeconomic inequality. Companies contribute to inequality through the methods by which they recruit, promote, compensate, and treat people in their jobs. They also drive inequality in how they manage their supply chains, ensure product access, complement or displace local entrepreneurship, lobby and fund political activity, set prices, craft their public relations messaging, practice philanthropy, pay taxes, and create sacrifice zones, where those who are the least empowered bear the brunt of environmental and health-related damage.

For investors, these practices can have adverse effects on their portfolios, with companies exposed to increased risks from reputational damage, exposure to litigation and regulatory sanction, reduced productivity, and broader systemic harms to the macroeconomy that companies and investors must absorb. Many have noted investors’ “unparalleled ability” to influence firms to better manage their human rights impacts, including those that relate to inequality. Given their duties to their clients, customers, and beneficiaries to mitigate these risks, investors have a key role to play in tackling inequality and incentivizing more fair, equitable, and just corporate behavior.

This report, copublished with Oxfam America, explores recent developments, data, and academic studies that point to rising investor interest in mitigating inequality as part of their fiduciary obligations. Investors will be able to use the arguments presented in this report to guide their stewardship activities with investee companies, with assurance that it is possible, desirable, and even in some cases necessary to reduce corporate inequality impacts to increase risk-adjusted investment returns

Read the report here.

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