More than 700 million people — or 10 per cent of the global population — still live in extreme poverty, which means they are surviving on less than $1.90 a day. Experts predict these figures will continue to rise as a result of the COVID-19 crisis alongside the ongoing impacts of conflicts and climate change. Improving the lives of the poorest and most vulnerable — ensuring no one is left behind — is an overarching theme of the Sustainable Development Goals (SDGs) and the primary focus of Goal 1: No Poverty. In order to achieve the vision set out in the SDGs, the fundamental issue of poverty must be addressed. 

Poverty is about more than a lack of income. It has a range of different socioeconomic dimensions, including: the ability to access services and social protection measures and to express opinions and choice; the power to negotiate; and social status, decent work and opportunities. Poverty is also the root cause of many human rights and labour rights violations. For example, child labour, forced labour and human trafficking are each deeply connected to poverty.

Under the UN Guiding Principles on Business and Human Rights, companies have a responsibility to respect human rights and labour rights in accordance with international standards which includes identifying and avoiding practices that perpetuate poverty traps. A company can do this by conducting human rights due diligence to identify, prevent, mitigate and account for how they address actual and potential human rights and labour rights impacts in their own operations and supply chains. 

Poverty and Decent Work

“Ending poverty and promoting decent work are two sides of the same coin. Decent work is both the major instrument to make development happen and also in effect, the central objective of sustainable development.” — Guy Ryder, Director-General, ILO

Breaking the cycle of poverty involves decent and productive jobs, sustainable enterprises and economic transformation. Work is a major route for many to escape poverty. However, working alone does not guarantee this, particularly if working conditions are not decent. In 2019, more than 630 million workers worldwide — almost one in five of all those employed — did not earn enough to lift themselves and their families out of extreme or moderate poverty. Respect and support for human rights and labour rights are central to reducing poverty. 

The International Labour Organization (ILO) defines decent work as opportunities for work that are productive and deliver a fair income, security in the workplace and social protection for families, better prospects for personal development and social integration, freedom for people to express their concerns, organize and participate in the decisions that affect their lives, and equality of opportunity and treatment for all women and men. 

Certain groups are disproportionately affected by working poverty and face additional constraints — such as limited access to adequate working conditions, poverty wages and an absence of social protection coverage. These groups include migrant workers, women, workers with disabilities, informal workers and temporary workers. Additionally, categories of workers such as informal workers, migrants and gig economy workers are often in informal undocumented jobs in global supply chains, making them vulnerable to labour abuses. 

Companies should identify workers in their supply chains who are vulnerable to poverty as part of their human rights due diligence process. Businesses hold a powerful lever for reducing poverty in their capacity as employers, producers and buyers through ensuring decent working conditions for their employees and workers across the supply chain. This includes, for example, fair wages, reasonable working hours, and adequate health and safety measures for workers. Sustainable procurement practices create the conditions to ensure decent work, which in turn can address working poverty issues in global supply chains.

Take Action to End Poverty

One important step a company can take to address poverty is to understand the impact they have on this complex issue. The Poverty Footprint: A People-centred Approach to Assessing Business Impacts on Sustainable Development is an assessment tool that enables companies and civil society partners to understand corporate impacts on multidimensional poverty. As a tool to help implement the SDGs, the Poverty Footprint provides a comprehensive overview of the factors that influence poverty while emphasizing stakeholder engagement and partnerships between companies and civil society as a means for establishing pro-poor business strategies.

Addressing poverty is a complex process that should involve dialogue and collaboration amongst companies and with stakeholders. The UN Global Compact Action Platform on Decent Work in Global Supply Chains builds an alliance of companies and partners who are committed to respecting human rights and fundamental principles and rights at work by leveraging their supply chains and taking collective action to address decent work deficits. The second phase launched in 2020 and focuses on developing strategies to reduce working poverty and re-think supply chains to transform them into engines of sustainable growth.