The Role of Financial Institutions in Mitigating Rising Economic Inequalities

Inequalities have far-reaching consequences, including impeding human capital development, eroding social cohesion, exacerbating polarization, increasing vulnerabilities in the financial sector, and restraining economic dynamism—ultimately threatening long-term stability. Large institutional investors, such as AXA, as universal owners, have a critical stake in addressing the growing economic disparities to support stronger societal, economic, and financial performance over the long term, typically by investing in companies that safeguard human rights, ensure good work conditions, advance diversity, equity, and inclusion, and create products and services that benefit all income classes. In the scope of these actions, the high levels of income inequalities and their relationship to wage policies, demand further investigation.

In an era marked by growing disparities, the OECD Centre on Well-Being, Inclusion, Sustainability and Equal Opportunity (WISE Centre) and the AXA Research Fund are embarking on a critical mission to explore how financial institutions can serve as catalysts for reducing inequality. This partnership brings together the OECD’s expertise in economic and social policy with the AXA Research Fund’s commitment to advancing knowledge that addresses global challenges.

This research initiative seeks to address a critical gap in the current evidence and knowledge base by providing deeper insights into the role of investors and financial institutions in influencing changes in economic inequalities and to provide actionable recommendations for investors to address these issues in their investment processes.  The partnership may also enhance existing knowledge and evidence on how investors and businesses influence people and inequality, while also guiding asset managers in developing strategies to address excessive inequality within the market economy. Such efforts could bridge research gaps and provide valuable input to the technical working groups and the TISFD research network.

Through this collaboration, the OECD WISE Centre and the AXA Research Fund aim to bridge the gap between research and action, offering evidence-based solutions to one of the most pressing issues of our time. This partnership aspires to create a future where economic growth is inclusive, sustainable, and shared by all. This initiative is not just about understanding inequality—it is about transforming the financial sector into a force for more sustainable and equitable distributions of economic resources. In doing so, it supports the OECD Observatory on Social Mobility and Equal Opportunity by providing fresh insights into how the private sector can help address rising inequality and foster a more level playing field.

For more details about their initiatives, please visit their websites: WISE | OECD and Observatory on Social Mobility and Equal Opportunity | OECD