Prioritising social good can lead to shared prosperity

This week, the international community gathered in Doha, Qatar for the Second World Summit for Social Development, a follow-up to the first Summit 30 years ago where the Copenhagen Declaration and Programme of Action were adopted - an ambitious commitment to put human well-being at the heart of development.

It comes at a moment where, exacerbated by increasing income and wealth disparity, environmental disasters and conflict, radical inequality and poverty are as pressing as ever. Despite extraordinary social and economic progress, more than one-third of the world’s population - over 2.8 billion people – live on daily incomes between $2.15 and $6.85. Employment insecurity still affects around 60 percent of people globally, from Europe to Asia and from North America to Africa and many are one crisis away from falling back into poverty.

The size of the challenges we face demands bold, systemic change. And while governments and civil society play critical roles, the private sector holds unique power to drive inclusive and sustainable growth. Business decisions already shape social outcomes for hundreds of millions of people. With over 80% of global trade flowing through value chains that provide livelihoods for more than 450 million people, there can be no doubt that how businesses source, pay, and invest determines whether growth is inclusive or exclusive.

Exactly one year ago, the World Benchmarking Alliance (WBA) inaugural Social Benchmark revealed a stark reality: only 4% of the world’s 2,000 most influential companies pay – or have a target to pay – their workers a living wage.  That’s why together with WBA – and in collaboration with United Nations Global Compact, World Business Council for Sustainable Development, Unilever, the Platform Living Wage Financials and many more – IDH issued a multi-stakeholder call to action urging UN Member States to prioritise living wages in the WSSD2 process.   As UN Secretary-General António Guterres highlighted in his opening remarks at the Social Summit, “In every country, governments and the private sector must join forces to promote decent work, living wages and pathways for workers to transition from the informal economy to jobs in the green, digital and care economies.”

The Doha Political Declaration now recognises living wages as essential for raising living standards and promoting inclusive growth, marking a critical step toward turning commitment into concrete action.

Business as a driver of social development

At IDH, we collaborate with relevant stakeholders across global value chains to develop a broader vision of shared prosperity. We see firsthand how the private sector can serve as a catalyst for decent work, reduced inequalities, and inclusive growth. From living wage-boosting mechanisms, living income sourcing to gender-inclusive value chains, business-led partnerships have demonstrated that when companies invest in people, they unlock not only social impact but long-term resilience.

No single actor, however, can effectively transform labour markets alone. Public-private partnerships are essential for scaling and sustaining social and environmental progress. Governments bring the enabling policy environment and set the framework of rules and regulations; businesses bring reach and innovation; and organisations such as ours act as conveners and solutioning partner to align all stakeholders and turn ambition into measurable results.

Our work on living wages and living incomes illustrates this clearly, which directly addresses poverty eradication, decent work, and social inclusion. Through our Roadmap platforms, companies, civil society, unions, and governments drive collective action on these issues in a practical and scalable way. For businesses, it means making commitments and taking action: integrating social and environmental targets into sourcing strategies, procurement contracts, investment decisions, and its own renumeration and broader HR policies.

In banana-producing countries, for example, collaboration between governments, global brands, and producers has led to wage increases for thousands of workers. In Europe, retailers across Belgium, the Netherlands, Germany, and the UK aligned to drive meaningful change in sourcing regions by pinpointing wage gaps and allocating contributions for all of their purchased volumes. 

We’ve seen how modest wage improvements, backed by both market and policy support, can lift many out of poverty. In Kenya and Malawi, multi-stakeholder partnerships have translated global living wage principles into local wage agreements. These efforts worked because everyone had ownership, from governments and unions to producers and retailers.  And by connecting with multilateral agencies such as the ILO and the UN Global Compact, for example through the UNGC Forward Faster platform, it's been possible to expand the reach far beyond agriculture.

For example, the Life and Building Safety Initiative (LABS) in India, Vietnam, Cambodia, and Indonesia works to provide safer working conditions in factories for apparel, footwear, and textiles by setting robust safety standards, embedding them within national frameworks, and collaborating closely with industry bodies, governments, and international partners, ultimately improving the lives of over a million workers, including more than 700,000 women.

This kind of systemic change is only possible and effective through partnership.

The argument against collective action is often that it is not allowed due to competition laws. However, our experience is different. It is possible, as we have learned so many times.

Building a resilient global economy

Contributing to inclusive and sustainable development goes beyond creating a just and equitable economy. It's also about building long-term resilience and competitiveness in the face of increasing instability. There is ample evidence that supporting social development through decent jobs and incomes strengthens economies and companies, and that adopting climate-resilient practices means securing supply for the future.

Business leaders in all regions, even where governments have stepped back, see sustainability as a catalyst for positive business impact. Bain’s survey of 750+ global B2B companies shows that those prioritising sustainable products grow faster, with 90% expecting business gains within three years versus 60% of laggards.

This is why we need to take a holistic approach to building resilient agricultural markets by linking social development with environmental responsibility and economic prosperity. In West Africa, for example, IDH is working with companies to strengthen local food supply chains by enabling access to finance, connecting small businesses to formal markets, and promoting climate-smart agriculture. This work is helping nearly 400,000 young people transition into decent work, building climate change resilience and demonstrating how social, economic and environmental goals can reinforce each other.

Similarly, IDH and CGAP's Abera program in Ethiopia supports smallholder farmers, particularly women and youth, with tools to strengthen their livelihoods and adopt sustainable agricultural practices that improve productivity while protecting natural resources. The result is a clear business case that maximises value in the face of climate change, not only for rural communities, but also for the companies and shareholders that are intricately connected to them.

A vision of shared prosperity

The private sector is a powerful engine for positive social and environmental impact. At IDH, we’ve seen that when public and private partnerships commit to living wages and incomes, climate resilience, and inclusive growth, they not only improve lives, but also build stronger, more stable markets.

Shared prosperity is not a distant ideal; it’s a practical path forward that's already being charted by companies, governments, and coalitions committed to change. In less than a week's time, the 30th UN Climate Conference (COP30) will be taking place Belém, Brazil, to discuss actions to tackle climate change in the face of growing disruptions and growing opposition to take decisive action. And this opposition needs to be listened to, as concerns are real and disruptions do affect people.

Truly resilient, inclusive and prosperous economies can only be achieved if we abandon previous ideas of growth and link economic development to environmental with social good. This way we can properly build a future that works for all.