Davos Agenda

We're ensuring every worker in our supply chain earns a living wage. This is why

Workers harvest tobacco leaves in Granges-pres-Marnand in western Switzerland August 18, 2010. The production of tobacco started in the 17th Century in Switzerland reaching its peak during the Second World War. In 2008 more that 260 farmers harvested 650 tons of two different types of plant the Virginie and the Burley according to SwissTabac, the federation of local producers. After the harvest, which takes place from mid-July to the end of August, the leaves will dry for two months before being delivered to the manufacturers. REUTERS/Denis Balibouse (SWITZERLAND - Tags: AGRICULTURE BUSINESS HEALTH IMAGES OF THE DAY) - BM2E68I17XA01

'Inequality is not a game of winners and losers; we are all losing.' Image: REUTERS/Denis Balibouse

Alan Jope
Chief Executive Officer, Unilever
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Davos Agenda

This article is part of: The Davos Agenda
  • Global inequality is destroying trust in institutions, fracturing society and holding back economic progress.
  • Business is an engine of prosperity that can improve the lives of billions of people around the world.
  • Unilever has announced a commitment to ensure everyone who directly provides goods and services to the company will earn at least a living wage or a living income by 2030.

Capitalism is changing; evolving so that our market-based systems build on their historical strengths to incentivize outcomes that are better for people, the planet and our economy. But the current pace of change is not fast enough. The two biggest collective challenges that we face - social inequality and climate change - are still getting worse, not better.

2020 saw a big increase in businesses making net-zero carbon commitments, and there is much to be delivered on that front. I believe that in 2021 we will see step changes in business commitments to additionally tackle social inequality. The COVID-19 pandemic has highlighted the depths of this issue, widening the gap for many. It’s time for action.

Inequality is not a game of winners and losers; we are all losing. Inequality destroys trust in institutions including business, it fractures society, and it holds back economic progress.

I'm convinced that business can help tackle entrenched social inequality. Business is the engine of prosperity that can improve the lives of billions of people around the world. But to do that, business needs to be done in a way that shares that prosperity more equitably. Put simply, too many people are not paid enough. They receive an unfair share of the value they create - and that must change.

Sharing value fairly

On 21 January, Unilever announced a comprehensive set of new commitments to tackle social inequality - key building blocks in our multi-stakeholder business model. These include a commitment to ensure everyone who directly provides goods and services to Unilever will earn at least a living wage or a living income by 2030.

I am highlighting this specific commitment because we know that achieving it will require collective action from business, government, civil society, trade unions and academia. We will need to drive this systemic change on a scale rarely seen before.

Increasing the incomes of the lowest-paid people in the world can unlock huge benefits in terms of health, education, gender equality, and quality of life. Employers will see higher productivity and engagement, reduced staff turnover, and a more prosperous consumer base. Together, this will benefit local, national, and global economic performance.

Collective action for a collective good

Over the last five years we’ve worked hard to enhance the livelihoods of millions in our value chain through programmes to help small-scale retailers and small-holder farmers.

Although we have improved the lives and livelihoods of millions, we did not change the game and create the wider systemic change to which we aspired. Our ultimate ambition is that everyone in our value chain earns a living wage or living income – just as our own employees do.

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To get to this new normal, though, we need transformational change, joining forces across sectors to achieve this. A first step will be to create reliable, scalable, transparent, and comparable living wage methodologies and better visibility of living wage data to raise the floor across whole industries and countries.

The delivery of this commitment is not going to be easy; we don’t have all the answers and, quite honestly, the scale of the challenge makes me nervous. I am, however, convinced it is the right thing to do both morally and economically and I take comfort in the fact that we have friends in Patagonia, L’Oreal, Nestle and others who have already started on this journey.

As capitalism evolves, more equitable value distribution will become a central feature and living wages as a minimum threshold will become the norm. Yet norms do not just happen, they are curated – and we believe that the leading businesses which are driving this agenda will be the successful businesses of the future.

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Related topics:
Davos AgendaCorporate GovernanceEconomic ProgressFuture of WorkFuture of Work
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