Integrated Reporting for Inclusive and Sustainable Global Capitalism

Introduction

Under the guise of free market globalization, multi-national corporations transfer money around the world searching for places with cheap labour and relaxed environmental and industrial laws for their enterprises (Watts & Hodgson, 2019). Consequently, capitalism as practiced today has resulted in exportation of millions of jobs to destinations where labour is cheaper and relaxed environmental regulations (Henry Jackson Initiative, 2012). The results are many displaced employees ill prepared for the residual high-skilled jobs; the situation is even worse for youths as the number of entry-level job opportunities have significantly dwindled. Additionally, the ensuing financial scandals as corporations seek for more profits have also generated awareness that the contemporary shareholders’ profit maximization governance model, especially in the short-run, does not improve the wellness for either the firms or society in the long run (Brunelli & Di Carlo, 2020). Consequently, inclusive capitalism as a concept and policy movement is attempting to improve business governance and hence the society by addressing the growing income and wealth inequality in the predominantly Western capitalistic systems. Inclusive capitalism is an argument that if private enterprise is encouraged through suitable policy interventions; then it can create more jobs for low-income people as well as provide underprivileged people with access to financial capital for business (Randa & Atiku, 2021). Arguably, inclusive capitalism has the potential for enabling poor people to purchase a variety of goods and services thus increasing their welfare.

The market short-termism, partly driven by today’s short term-focused financial markets; compels managements to focus more on short-term financial profits rather than sustainable long-term business development (Henry Jackson Initiative, 2012). For example, recently Chief Executive Officers (CEOs) and boards tend to manage their companies against quarterly targets aimed at generating highest returns now, neglecting their companies’ long-term needs. All this is happening within the context of rules-based national and global surveillance systems; the argument is that what have gone wrong did not involve illegal activities. There is clear manifestation that complex global phenomena ranging from financial to ecological processes determine the fate of communities across the world. Additionally, the problem-solving capacity of the existing systems of global institutions in many areas are losing effectiveness, accountability, or responsiveness in resolving these global dilemmas. For example, the ensuing neoliberal policies have compelled workers to be more flexible, mobile and adaptable given the rapidly changing and uncertain labour markets characterised by casual, part-time and contract work (Watts & Hodgson, 2019), adds to the present instability. According to Gertz and Kharas (2019), there is a rising agreement that neoliberalism; a form of political-economy governance model has under-delivered for a majority of people over many years in many areas. Arguably, the extent of job losses, reduced tax revenues, dwindling overall private savings and so on underscore this phenomenon. Several reasons for the persistence of these problems can be articulated; but at the most fundamental level, these policy inconsistencies are arguably issues of failing global governance systems requiring systemic institutional reforms (Held & Young, 2009). Debatably, corporate sustainability initiatives promise alternatives to the dominant traditional, short-term profit-oriented approaches to firm management by balancing economic, environmental, and social forces not only for the present and but also for future generations (Lozano, Carpenter & Huisingh, 2015).