Disclosure of corporate risk from socio-economic inequality

Todd Cort, Stephen Kim Park and Decio Nascimento

Journal of Sustainable Finance & Investment, 2025, vol. 15, issue 3, 714-732

Abstract: Growing socio-economic inequality poses one of the greatest challenges to society, thereby raising new questions about the responsibility of corporations to address its effects. Inequality also poses material risks to business performance. Like climate risk, inequality can impact business across a broad set of sectors and economies on a global scale. To mitigate risks and leverage opportunities to generate positive outcomes from corporate sustainability investments, managers and investors need better data on the business risks posed by inequality and the impact of corporate conduct on it. However, the current transparency infrastructure is inadequate to meet this need. This article reviews the current state of corporate disclosure on inequality and assesses its utility to companies as well as investors and other stakeholders. Drawing on innovations in climate disclosure, we suggest a path forward for companies and investors to drive improved disclosure from companies on the risks presented by socio-economic inequality.

Date: 2025
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DOI: 10.1080/20430795.2025.2452643

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