I saw the news that you’re planning to donate much of your wealth to combat some of the massive challenges humanity is facing. Amazing. But I believe that you have the opportunity to change the course of our world more profoundly by taking a different and more radical approach.
By using the three ways suggested below you can make the seismic shift needed to change the future of our world, lifting millions of people out of poverty long term, leap humanity forward in countering the rising inequality and make a drastic change to combating climate change, air pollution, and the mountains of plastic waste entering our oceans each year.
And implementing these suggestions would also be good for business long term.
Fixing poverty, social exclusion and inequality at its root.
As I’m sure you know, half of the people in our world live in poverty, with five million babies, pre-schoolers, and toddlers not making it to their 5th birthday each year (which is more than double the total annual global deaths due to Covid during the height of the pandemic). Here in the UK over 4 million children live in poverty, and the figures in the US are not looking good either.
Inequality is rising in most countries in our world, with all it’s scary consequences such as increased division and polarisation of our societies, social unrest, and a decline of the physical and mental health of us all.
Fixing poverty, social exclusion and inequality at its root requires two things: A) Empowering people with a disadvantage to use their talents. B) ‘Just Payments’.
A great example of A) and B) are SoleRebels who have opened manufacturing facilities in disadvantaged areas in Ethiopia, paying their workers three times the industry average wage. This tackles poverty far more effectively compared to for example the TOMS Shoes model to 'buy one, give one'. As Bethlehem Tilahun Alemu, Founder of SoleRebels says: “If you give a kid shoes, they wear out or they grow out of them, and then what do they have? If you give the kid’s parents a job, the whole family will always have shoes”.
I read that you are already committed to empowerment, particularly to fix gender inequality, and to pay competitive salaries to your staff. The following suggestions in A) and B) would enable you to play an even more powerful role in truly fixing poverty, social exclusion and the rising inequality in our world.
A) Empower people out of poverty and social exclusion
1. Empower people with a disadvantage into jobs, like Goodwill Solutions.
Goodwill Solutions, a logistics and warehousing company in England is a great example of transforming people’s lives by providing training and employment to people coming from a marginalised background (and are listed in the FTSE fastest growing companies in Europe).
2. Empower disadvantaged suppliers with better market access.
For example by providing free 'sponsored' ads to promote small suppliers from poorer regions in your product listings; or providing investment/ training/ facilities/ logistics to become stronger businesses. You could consider including selection criteria to qualify for this opportunity such as how a supplier in turn empowers people and applies ‘Just Payments’ (see B)).
3. Transforming regions through empowerment for example by replacing E-waste sites.
Provide workers at E-waste sites in Africa and Asia (where many old laptops and other electronic waste eventually end up) with other opportunities to take away the serious health threats workers on these sites face by processing the electronic waste (e.g. the high levels of toxins lead to inhibiting the development of the reproductive system, nervous system, and the brain in particular; 80% of children in processing areas have dangerous levels of lead in their blood). Imagine the impact you would have on these people’s lives by clearing the e-waste sites and work across supply chains on genuinely upstream circular solutions. You could empower communities living here with other opportunities such as education and employment in circular design consultancy; or production facilities to scale up natural packaging solutions, such as by partnering with companies like Ecovative to scale up robust packaging solutions made of harmless material.
Empowering people effectively requires a few key ingredients that lead to better outcomes. I write more about what these are in my books. Inspirational leading examples that create high success rates are Ctalents, a coaching and recruitment company for people with visual and hearing impairments in The Netherlands and Brigade and the Beyond Food Foundation in London who empower people who were homeless into meaningful work very successfully.
If we look at the big picture, empowerment is only half of the answer to eradicating poverty and inequality. The other part of the answer are ‘Just Payments’.
B) Just Payments
Before going into what this means I'd like to warn you that this is the most challenging area due to how we have been conditioned for so long. 'Just Payments' may seem as radical as it once did to allow women to vote and to abandon apartheid and slavery. But I believe it is the key to profoundly changing the lives of many families and generations to come. It is also the key to unravelling the massive error we have made in implementing Adam Smiths’ free market system.
Adam Smith warned us very clearly for the disastrous error in implementing his philosophy. He said ‘free market economies can only function with strong principles of justice, otherwise our societies will crumble into atoms’. And yet this is precisely what we have ignored. And what is causing much of the havoc in our world.
If we look at what justice means at its essence it is ‘to render each their due’ (as defined by Roman Law in the sixth century AD). Imagine being a major force in righting this wrong by adopting three suggestions:
4. Just Payments across your distribution channels.
If we look at the definition of justice, ‘just payments’ means giving each party involved the share of the pie they are due based on the contribution that they make. So not a minimum ‘fair price’. But actually giving each party the percentage they are due for their contribution. Imagine if the cocoa farmers in West-Africa would get paid the actual share they contribute to the chocolate products sold on your platform. It would lift many families out of extreme poverty, and make an end to the child slavery of the 1.6 million children working on these farms. Tony’s Chocolonely are a great example to look into who are making huge leaps forward here.
Similarly, imagine how it would change many lives if the farmers on banana and pineapple plantations in South America would get paid their actual share for growing and harvesting the fruits (instead of the typically 4 percent they currently get). Or dairy farmers in the UK who often struggle to break even at the prices they are forced to accept. Or all the writers and many other creatives who often have little power in the supply chain and get hugely underpaid for their share.
5. Just Payments within your company.
Imagine if you would apply the same concept here. So let’s forget the conditioned thinking of ‘minimum wage’, ‘federal wage’, or ‘living wage’ for a moment and truly consider the essence of justice. So paying everyone a percentage (or ownership share) that reflects their input. Not many economists argue that everyone should earn the same. For market incentives to work and resources to be allocated efficiently around market demand, it works well to recognise factors such as effort, risk, talent, etc. But, what most agree is that how the pie is divided should be just. To get a sense of how unjust payments have become we can look at the CEO to average worker pay gap. On average this pay gap has risen in the US from 20:1 in 1965 to around 400:1 in 2021. In India this figure is 229:1. In the UK 200:1. By comparison, in Sweden this figure is 60:1. And in Japan 16:1.
Can we really say that this justly reflects what everyone is due for their contribution? Has the contribution by CEOs increased so much more than the average worker? Are CEOs in the US, UK and India contributing so much more than their counterparts in other countries like Sweden or Japan? Do we fully realise what this gap does to our rising inequality and all its consequences for society? Professor Stiglitz (Nobel Prize Laureate and previous chief economist at the World Bank) explains very well in his book what 'The Price of Inequality' is for our societies if we don't curb this trend. Not only is this rising pay gap unjust, it also does not seem to serve any purpose. If we look at companies like Costco who are leading much lower CEO to average worker pay gap, we see proof that their lower pay gap does not lead to inferior commercial results, as they outperform their competitors (with higher pay gaps) on almost all long term indicators including turnover growth and shareholder gains.
6. Just Payments in a wider context.
Imagine that you implemented suggestions 4. and 5. and demonstrated the profound difference it makes to poverty, inequality and all related issues. And that it turns out to be better for business longer term too. Imagine how powerful you could be in inspiring and educating others around the world. And imagine how it would enable you to lobby for incorporating this change to be incorporated where justice belongs – in our laws – aligned globally.
By 'pre-distributing' fairly we can fix poverty and inequality in a far more effective and more dignified way instead of redistribution through welfare or charitable donations as an aftermath.
By adopting the suggestions in A) and B) you would not just make an enormous contribution to tackling the United Nations Sustainable Development Goals of ‘Zero poverty’ and ‘Inequality’. You would create synergies and positive knock on effects on related UN SDGs such as zero hunger and health & wellbeing. Interestingly, targeting the UN SDGs effectively leads to a 200-400% higher impact return on investment.
C) Prevent harm to our planet upstream by ‘True Pricing’ and ‘True Circular Design’
I read that you are committed to making many improvements towards Net Zero by greener buildings, transport, reducing packaging, and supporting suppliers with measurement tools and guidance to reducing their emissions, and implementing the Climate Pledge label. Great!
Please allow me to make four further suggestions to go beyond this and lead a profound change to combating climate change, air pollution (causing 6,5 million deaths each year), the mountains of plastic waste entering landfill and our oceans each year, and improve our overall health and wellbeing.
7. ‘True Pricing’ and scale-based distribution fees dependent on impact.
‘True Price’, co-founded by Michel Scholte implies measuring and charging the true price of a product, incorporating the costs of any social or environmental harm caused in the supply chain.
If this is only implemented by those who care about their impact this could work counterproductive. They would be less competitive price wise compared to those who don't incorporate externalities in their price. Particularly considering people with lower incomes who may struggle to buy sustainable alternatives if they are more expensive. But it could work well if sustainable products are not more expensive to harmful alternatives.
You could consider partnering with the True Pricing team to implement this across all suppliers on your platform. Until this would be fully implemented you could charge higher distribution fees for harmful products, and lower rates for more sustainable products. The impact would be enormous.
8. Phase out critically harmful products.
Following the example of France in making ‘design for obsolescence’ a criminal offence you could consider setting a target date for products to meet criteria that are critical for the future of our planet to be able to pass your supplier assessment. Design for obsolescence could be one, or those that contain harmful chemicals or ingredients. You could anticipate the plastic pollution Treaty the UN is working on and lead the critical changes that are needed. The sooner we tackle this issue the better considering that plastic in our oceans is estimated to outweigh all fish by 2050 (and is estimated to make up 20% of our carbon emissions due to the oil used in plastic), and we breathe, drink and eat 5 grams of micro-plastics on average each week. Imagine the impact you would have by working with suppliers to phase out plastic fast as much as possible.
9. ‘Products as a service’
‘Light as a Service’ provided by Philips to for example Schiphol Airport, as opposed to light products, aims to reduce energy use by 50% and fixtures and fittings by 75%. We see this ‘as a service’ concept now in other areas such as Kaer’s ‘Cooling as a Service’ in Asia, or Bundles in The Netherlands who lease washing machines. Could your platform play a role in distributing more products ‘as a service’? Incentivising more durable, repairable products that are maintained by the manufacturer through this model is far more effective in reducing emissions and waste compared to refurbishing, remanufacturing or recycling.
10. Implement a ‘Swedish Return System’
The Trade Association for Grocery of Sweden (SvDH) and the Swedish Food and Drinks Retailers Association (DLF) have implemented a reusable packaging solution across their food and grocery supply chain using crates instead of disposable cardboard packaging, involving over 1500 businesses. It has reduced costs, product damage and GHG emissions by 78% compared to disposable cardboard packaging. The crates have a lifetime of 15 years, and are then recycled. Imagine the impact of implementing this at scale throughout your supply chains and prevent emissions (and costs) involved with recycling cardboard packaging etc.
There are many amazing pioneers in each of these areas. But there are not many people in this world who can implement these suggestions at scale like you.
Back in 1987, the Bruntland Commission defined environmental justice as ‘meeting the needs of the present generation without compromising the ability of future generations to meet their own needs’. By adopting the suggestions in C) you would lead a major transformation towards creating environmental justice and a more flourishing world for generations to come.
The empowerment suggestions in A) would transform the lives of many families. And particularly if you would lead on the Just Payments suggestions in B) to be adopted throughout our world, it would be as bold and as just and as transformative as stopping apartheid and slavery. It would change the course of history and fix a major cause of poverty and inequality right at its root. As Nelson Mandela said:
'Eradicating poverty is not an act of charity, it is an act of justice.' Nelson Mandela
I'm certain that if you did lead these bold changes many more people would want to buy and sell through your platform, work in your business, and you would gain other competitive advantages. As a Deloitte study shows companies with a strong purpose grow three times faster than their competitors.
If you would like to read more about other ways to tackle our key global issues as effectively as possible, and many other inspirational examples from around the world, I would happily send you my new book that will be released in October 2023.
It is called ‘LEAD LIKE A GENIUS: How to outgrow the competition and transform our world.’ You can find out more at www.BigTreeGlobal.net/books.
Or if you are interested in exploring any of the suggestions and other opportunties, please let me know.
It would be great to hear from you,
Melanie