Nurturing Shared Prosperity and Safeguarding Fundamental Human Rights

Of late, many awards have been held to recognise the implementation of ESG. But there is one question the judges should ask: when a company grows, who shares in its prosperity?

A number of companies are competing to take the stage and receive awards for their ESG implementation. Their sustainability reports are growing thicker and their scores are improving. Some can already demonstrate lower emissions. That is progress and deserves recognition.

Yet companies’ sustainability disclosures have prompted me to reflect on something rarely seen on assessment forms. When a company grows, who shares in its prosperity? If that growth comes at a social cost, who pays for it? These questions bring together the idea of shared prosperity and human rights.

Not a matter of charity

The World Bank made shared prosperity one of its two main goals in 2013. The way it is measured is fairly simple: rank the entire population from the lowest to the highest per capita income or expenditure, then take the bottom 40 per cent.

This group is known as the B40 (bottom 40). Prosperity is considered to be shared when their real incomes also rise, preferably faster than the average. Its members are not fixed: anyone who falls into the bottom 40 per cent is included.

The concept appears clear, but is often misunderstood. Khan et al. (2024), in their systematic literature review, note that shared prosperity is frequently equated with charity or development assistance. In fact, it means that the pie continues to grow and is distributed in such a way that those at the bottom also move ahead.

Robert McNamara, a former World Bank president, put it aptly: growth without equity is socially unstable, while equity without growth merely divides stagnation.

Percentages can mislead

There is a trap in how we read the figures. Kakwani and Siddiqui (2023) examined data from 173 countries over 2000–2021. In percentage terms, global growth appeared to favour poorer countries because their growth rates were higher.

In absolute terms, the picture was reversed. Rich countries added far more income in dollars, so the gap widened.

The same can happen within a company. ‘Workers’ wages rose by 8 per cent’ reads well in a report. But if directors’ pay rises by 5 per cent from a figure dozens of times higher, the gap continues to grow in absolute terms.

Kakwani and Siddiqui are unequivocal: growth accompanied by a surge in inequality cannot be called inclusive.

Indonesia has its own figures. Statistics Indonesia (BPS) recorded a Gini ratio of 0.368 in March 2026, slightly up from 0.363 in September 2025. The B40 holds just 19.22 per cent of national expenditure. In urban areas, its share is even smaller, at 18.31 per cent. Two in five Indonesians enjoy less than one-fifth of total national expenditure.

When rights are eroded first

So where do human rights come in? Von Braun and Gatzweiler (2014) offer the concept of marginality: a position in which a person or group is not by choice pushed to the margins of social, economic, political and ecological systems, restricting their access to resources, services and life choices.

Their example feels close to home. Indigenous communities who depend on forests and hold customary land rights may not consider themselves poor by their own standards. They become poor when that access is taken away, whether through new regulations or business expansion.

The authors describe such circumstances as economically inefficient and unjust from a human-rights perspective. Prosperity can therefore fail to be shared because people’s rights have already been eroded before the pie is divided: land is taken without consent, wages are insufficient for a decent standard of living, and residents’ voices go unheard.

Our own experience teaches the same lesson. Low wages were once a mainstay for attracting investment, but they cannot serve as a foundation indefinitely. At company level, the trust of surrounding communities is an unwritten licence to operate.

As long as residents feel they share in the benefits, that licence remains intact. Once they feel left behind, the warning signs are easy to recognise: land disputes, strikes, or opposition to factory and mine expansions.

From dairy farms and oil-palm plantations to toddlers’ plates

Businesses can share prosperity. Christiansen (2014), who coined the term creating shared value (CSV), showed how the dairy industry brings small farmers into its supply chain.

Historically, in East Java, Nestlé Indonesia has partnered with smallholder dairy farmers since 1975, when it bought just 160 litres of milk. Today, its partners include more than 27,000 farmers across more than 31 cooperatives.

But the story of oil-palm plantations reveals another side. The Plantations Law (Law No. 39/2014, as amended by the Job Creation Law) requires companies to facilitate community plantations covering 20 per cent of the land they develop, no later than three years after a cultivation rights title (HGU) is issued.

On paper, this is shared prosperity mandated by the state. On the ground, the Consortium for Agrarian Reform recorded 404 agrarian conflict flare-ups in 2025. A third took place on plantations, and more than half involved oil palm.

The same scheme can generate welfare or disputes. The difference lies in how fairly land, benefit-sharing and community consent are addressed.

A broader example can also be seen in the fact that being part of a supply chain does not necessarily mean that rights are protected. East Java, for instance, accounts for 58 per cent of national fresh-milk production. Yet the 2024 Indonesian Nutritional Status Survey recorded around 430,000 stunted children under five in the province.

Nationally, the rate is 19.8 per cent, or nearly one in five children under five. Stunting concerns children’s rights to health and adequate food, and is closer to the boardroom than we often think.

Workers’ wages and the prices paid to farmers determine what families put on their plates. Maternity leave and breastfeeding facilities determine whether working mothers can breastfeed. Factory and mining operations also affect the availability of clean water in surrounding areas.

Donating milk and supplementary food is certainly worthwhile. But the more honest measure is this: are the wages and prices paid by companies sufficient to ensure that workers’ and suppliers’ families do not have to wait for assistance?

Xetor and Mensah (2025) remind us that the ultimate outcome of inclusive growth is an expansion in people’s capabilities, not merely an increase in income. A child affected by stunting has already lost some of those capabilities before even starting school.

A note to the judges

ESG awards can help change how companies understand the ‘S’. There are several areas that, in my view, deserve greater weight. The most fundamental is to assess the scale of impacts from the perspective of stakeholders.

Next, assess human-rights due diligence across the entire value chain. Since 2011, the UN Guiding Principles on Business and Human Rights (UNGPs) have called on companies to identify, prevent and remedy impacts, including those in their supply chains.

Indonesia also has a National Strategy on Business and Human Rights under Presidential Regulation No. 60/2023. Companies that honestly map their greatest risks deserve a higher assessment than those busy showcasing flagship programmes.

Judges should also consider whether residents and workers can raise complaints, and whether those complaints are resolved. Khan and colleagues include the voices of vulnerable groups as part of prosperity itself.

Data on how many complaints are received and how many are actually resolved is more honest than photographs of ceremonial aid handovers.

Finally, make room for companies willing to disclose adverse impacts. A report that contains not a single incident should itself invite scrutiny.

Prosperity shared with whom?

ESG awards are not a corporate vanity contest. They are an opportunity to check whether a company’s growth expands prosperity or quietly shifts its risks onto workers, farmers and communities around its operations.

A company that takes ESG seriously should be able to answer this simple question with data: prosperity shared with whom?