ESG Focus: The Social Divide That Keeps Dividing

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FNArena's dedicated ESG Focus news section zooms in on matters Environmental, Social & Governance (ESG) that are increasingly guiding investors preferences and decisions globally. For more news updates, past and future: 
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ESG Focus: The Social Divide That Keeps Dividing

Despite steps being taken to bridge the global economic gap inequality remains vast and entrenched in our society.

-The looming threat of further climate crisis most disadvantages those already at the bottom of the economic scale
–Nearly half the world’s population are trying to survive on less than $8.20 per day?
-Despite a desire to enact systematic change, Australians are hesitant to upset the existing status quo

By Danielle Austin

Recent reports show that economic and gender inequality continue to be intrinsically linked, as extreme wealth continues to be held by a select group and the traditional and patriarchal status quo is reinforced through wealth inheritance.

Despite steps being taken to introduce new opportunities to disadvantaged groups, gender and economic inequality remains a pressing issue. 

Closer to home the economic gap continued to increase throughout 2019 in Australia. In its latest report on the state of global inequality, aptly titled Time to Care, Oxfam reported that while the number of individual billionaires in Australia did decrease from 2018 to 2019, the average wealth of these billionaires grew, on average, by $685m during the same time period.

Currently within Australia the richest 1% of our population own 22.2% of the wealth of the entire nation, more than double the wealth held by the bottom 50% of the population, who collectively possess just 9.2% of the nation’s wealth. 

The possession of wealth continues to be a man’s prerogative, and in response Oxfam has proposed the building of a feminist human economy to redress the imbalance.

This proposal reflects the general feelings of Australians who have overwhelming voiced desire for social, economic and political change to shift this balance, according to Credit Suisse’s latest barometer report, which found increasing pressure from Australians to narrow gender and economic inequality within our nation.

Credit Suisse reported over 72% of Australians agree that the national economy has been too one-sided, prioritising economic growth over economic sustainability. Despite over half of the population considering Australia a progressive nation, they are also hesitant to embrace changes that may upset the status quo of the current system, leading to increasing political polarisation.

According to Oxfam, this gendered economic divide is driven by the undervaluation of ‘care work’, that is the cooking, cleaning, gathering, and other household duties that have traditionally been considered women’s work.

These roles continue to be filled primarily by women, who not only take the primary burden of care work at home, but are also more likely than men to be employed in domestic or aged care roles which are vastly undervalued.

Despite these tasks being necessary to support a functioning workforce, Oxfam has conservatively estimated that global unpaid care work is in excess of a monetary value of $16trn.

More Australian Companies On Board

Reports from Bloomberg indicate that many reputable companies are taking steps to redress the gender imbalance. This year more companies than ever before provided data for Bloomberg’s 2020 Gender Equality Index.

325 public companies from across 42 countries and regions contributed data, with Challenger ((CGF)), nib holdings ((NHF)), Nine Entertainment ((NEC)) and Scentre Group ((SCG)) this year joining five other existing Australian companies in supplying data to Bloomberg.

The Gender Equality Index shows that change can be implemented at a grassroots level and affect systematic change. Those companies led by a female CEO had more women in management positions than those helmed by a male CEO, while those same companies also reported having more women in revenue-producing roles.

These companies are committed to tackling gender parity in the workplace through transparency of their gender-gap related goals, with 39% of the participating companies demonstrating public targets to increase female leadership.

Despite such commitments to bridging the economic gap by select organisations, global policy fails to make the changes needed to enforce lasting impact. According to Oxfam, governments across the globe continue to enact policies, or fail to change past policies, that are entrenched in racism and sexism that disadvantage minority groups and reinforce the gendered economic divide. 

Looking forward it is predicted that without radical change at policy level this gap will only increase until the difference between those who hold wealth and those who don’t becomes unsustainable on the economy.

Women and girls, who already globally undertake 12.5bn hours of free labour every day in essential work, will be the first to feel the burden of diminishing resources. They are the ones most likely to bear the brunt of increased labour after future natural disasters as resources such as food and water become harder to source.

It is women and girls who will commit more hours to procuring necessities to sustain their families, further entrenching the divide in wealth between men and women. It is the poorest members of our global society, and those with the least access to resources, that will be hardest hit by future natural disasters.

Though natural disasters are already estimated to cost Australians over $13bn each year, the economic impact of these disasters on women and girls is harder to estimate.

Six Proposals For A Fairer Economy

The overwhelming message from Oxfam’s report is that an economy that supports the 99% over the 1% is non-negotiable. The report proposes increased taxation of the wealthiest 1% of the global population and a focus on collaboration between government and business to achieve six goals: 

–Invest in universal access to safe water, sanitation and domestic energy systems, as well as universal childcare, eldercare and care for people with disabilities;

-End extreme wealth to end extreme poverty, by taxing wealth, high incomes, and cracking down on loopholes and inadequate global tax rules;

-Legislate to protect the rights of all carers and secure living wages for paid care workers;

–Ensure carers have influence on decision-making processes;

–Challenge harmful norms and sexist beliefs that see care work as the responsibility of women and girls and perpetuate economic and gender inequality;

-Value care in business policies and practices, such as crèches and childcare vouchers, flexible working hours and paid leave.

The data from these reports make it clear that the system requires change in order to benefit our society’s most disadvantaged groups and establish a fairer economy.  

FNArena's dedicated ESG Focus news section zooms in on matters Environmental, Social & Governance (ESG) that are increasingly guiding investors preferences and decisions globally. For more news updates, past and future: 
https://www.fnarena.com/index.php/financial-news/daily-financial-news/category/esg-focus/

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