Do private sustainability strategies overlook the centrality of income inequality in sustainable development?

Income inequality has taken center stage in the conversation about sustainable economic development. The 2011 Occupy movement highlighted disparities in income and power between the 99 per cent and the 1 per cent. Thomas Piketty’s 700-page tome Capital in the Twenty-First Century, published in English in 2014, sold over 1.5 million copies—“the closest thing to a pop-culture sensation heavyweight economics will ever provide” (The Economist). And in January 2015 the World Economic Forum—traditionally focused on investment and growth—published a 14-point plan to tackle inequality.

At the same time, private governance approaches for global supply chains and sustainable sourcing are penetrating the market. Both voluntary, ethical standards-setting organizations (such as Fairtrade International, Forest Stewardship Council, and Rainforest Alliance) and own-brand programs (such as those adopted by Unilever, IKEA, and Tesco) are framing their understandings of sustainability and developing theories of change. However, it is not clear that private initiatives have incorporated income inequality into their strategies. Instead, they focus on worker health and safety, the right to organize, and enforcing a minimum wage.

The aim of this paper is thus twofold. First, it draws on empirical literature from across disciplines to argue that sustainable development requires improvements in both global and within-country income equality. It shows that inequality has not been improving through natural processes and suggests that targeted interventions, explicitly aiming to address income inequality, are required make incomes more equal. Income inequality must be central to sustainable development strategies. Second, it examines the degree to which voluntary standards setting organizations have incorporated income inequality into their strategies for sustainable development. Is there is a disconnect between the centrality of income equality in sustainability discourse and the incorporation of income quality enhancing strategies in private sustainability initiatives?

To answer this question, the study reviews the mission and vision statements, statutes, and strategic plans adopted by 33 global voluntary, ethical standards setting organizations (those included in a database previously constructed by the author). Social strategies will be coded by type (right to organize, healthy/safe working conditions, income equality) and the findings analyzed to evaluate whether income equality has, indeed, taken a back seat to other social goals. This investigation is in the initial stages and has not yet generated findings. The working hypothesis is that there is, indeed, a dearth of income equality-oriented strategies within private standards-setting organizations. If this is, in fact, the case, the conclusion will focus on how sustainability strategies may fall short of their purported sustainable development goals. In particular, they will fail to achieve the objectives of creating shared value, circular trade, and a fair global economy.

This submission intends to contribute to the conversation about “new modes of production” by critiquing an existing mode of production in the social economy—voluntary ethical standards-setting organizations. It provides an empirical account of how such initiatives could be further enhance—by including economic inequality in their strategies of intervening in traditional modes of production.