News & Media

G20 must tackle the “cost of profit” crisis causing chaos worldwide, says Oxfam

November 14, 2022

G20 countries are receiving US$136 million every day in debt repayments from the world’s poorest countries at a time when up to 828 million people are facing hunger.

The “cost of living” crisis is more accurately a “cost of profit” crisis – of rising billionaire wealth and corporate mega-profits – that is driving up poverty, hunger, indebtedness and deprivation around the world, Oxfam says, as the G20 Summit begins in Bali.

“If the G20 are serious about tackling this looming global economic catastrophe they need to put their own houses in order. That’s where the real cause of this crisis lies,” said Oxfam’s G20 Lead Joern Kalinski.

“In reality we are facing a ‘cost of profit’ crisis. The richest are getting richer, while ordinary families and the poorest countries are being squeezed dry,” said Kalinski.

Since the start of the pandemic, poor countries have had to shell out US$113 billion to their rich G20 country creditors, during a time that four times more people died of Covid in poorer nations than in rich ones.

In 2021, on average, poor countries were forced to spend 27.5 percent of their budgets on debt repayment – four times more than on health and 12 times more than on social protection. Even the public climate finance they are getting from rich nations, including many in the G20, are 71 percent loans.

Meanwhile the G20’s biggest corporations are making record profits. BP made £7.1 billion, their biggest profits in 14 years, and BNP Paribas € 2.76 billion in just the past three months. Nine out of ten of the biggest fossil fuel companies are headquartered in G20 countries. US corporations are seeing their biggest profit margins since 1950 and have been accused of ‘greedflation’; driving higher inflation through price hikes.

The G20 is home now to 89 percent of all the billionaire wealth in the world – at around US$10 trillion. This has grown by US$1.88 trillion, creating 287 newly-minted pandemic billionaires, since 2020. Energy and food billionaires are currently getting richer by a half-a-billion dollars a day.

Oxfam urges the G20 to acknowledge the consequences that this shocking inequality is visiting on ordinary citizens the world over in the form of mass hunger, death and worsening poverty.

In Somalia, Ethiopia and Kenya historic levels of drought mean that one person will likely die of hunger every 36 seconds between now and the end of the year as the worst-hit areas hurtle towards famine. Women and girls, who are often the main food producers, primary caregivers, and stewards of household nutrition, are at higher risk of hunger.

The Ukraine war is an additional layer to existing problems. While 828 million people face hunger, the world’s main food traders made record profits and food and agribusiness billionaires increased their collective wealth by US$382 billion (45 percent) over the past two years. The United Nations has appealed for US$17.1 billion in humanitarian food security assistance for 2022 but so far donors have only given US$7 billion.

Globally progress in fighting poverty has halted, according to the World Bank, with poverty increasing during COVID-19 for the first time in decades. Inequality has grown too; with the poorest seeing their incomes decline twice as much as the richest.

“Austerity is the exact wrong reaction – a textbook blunder – that is ripping away social safety nets and beating people down into poverty,” Kalinski said.

Recent Oxfam research on inequality shows that despite the worst health crisis in a century, half of all poor countries have cut their share of health spending. Almost half of all countries cut their budget share going to social protection, 70 percent cut their share going to education and two-thirds failed to raise their minimum wage in line with economic growth. Over the next five years, three-quarters of all countries globally are planning further cuts totaling US$7.8 trillion dollars.

143 of 161 countries Oxfam surveyed froze tax rates on their richest citizens, and 11 countries even lowered them. Corporate tax dodging also continues on an industrial scale with an estimated one trillion dollars of corporate profits shifted to tax havens in 2019.

The G20 must tackle the root causes of hunger: extreme inequality and poverty, human rights violations, conflict, climate change and food and energy price inflation. Oxfam says the G20 must develop an economic and social rescue plan that protects the rights of the poorest people and tackles extreme inequality. This means:

Championing systematic strategies to tackle inequality and monitoring progress by rejecting austerity, boosting inequality-busting public spending, making tax more progressive, and increasing workers’ rights and pay
Widescale debt relief and significant debt cancellation for the poorest countries
Increasing taxes on windfall profits, wealth and corporations
Issuing more Special Drawing Rights, and allocating more to the poorest countries
Boosting inequality-busting aid
Delivering on climate finance, especially for the most vulnerable countries
Committing to enhancing pandemic preparedness and building more resilient systems.

To halt the worsening hunger crises the G20 must:

Urgently mobilise financial resources into humanitarian emergencies
Address the root causes of hunger crises including climate change, conflict, poverty and inequality, human rights violations and food price inflation
Ensure that blockades, economic sanctions and military activities in all countries do not hinder the free, safe and reliable transport of food and agricultural supplies, especially in conflict-affected areas
Rebalance the power in food supply chains to create a more sustainable and just food system.

Notes

“G20 countries are receiving US$136 million every day in debt repayments from the world’s poorest countries”: Oxfam calculations based on World Bank International Debt Statistics database: Principal repayments plus interests paid by low and lower-middle income countries to G20 countries in 2022 divided by 365 days.
“Since the start of the pandemic, poor countries have had to shell out US$113 billion to their rich G20 country creditors”: Oxfam calculations based on World Bank International Debt Statistics database: Sum of principal repayments plus interests paid by low and lower-middle income countries to G20 countries in 2020, 2021 and 2022.
“The G20 is home now to 89 percent of all the billionaire wealth in the world – at around US$10 trillion. This has grown by US$1.88 trillion, creating 287 newly-minted pandemic billionaires, since 2020”: Oxfam calculations based on Forbes billionaire list from 18 March 2020 and 31 October 2022.

Investigation reveals big pharma’s lobbying against COVID-19 intellectual property waiver

November 11, 2022

An investigation by Politico and The Bureau for Investigative Journalism has revealed that:

Pharmaceutical companies threatened to withdraw investment from countries including Indonesia, Colombia and Belgium if they supported an intellectual property waiver for COVID-19 vaccines, tests, and treatments. Colombian officials in Geneva were told by their government that supporting the waiver might disrupt vaccine negotiations with Pfizer and others.
Top pharmaceutical industry executives enjoyed direct access to senior officials within the EU, which was opposed to a waiver, and encouraged potentially rogue member countries, including Italy and France, to fall into line.
The German government pressured fellow EU governments to oppose the TRIPS waiver, and when concerns were raised about how the EU waiver opposition looked to the rest of the world, Germany proposed that this could be managed with “smart communication on the topic” that “underlines the proactive role of the EU in providing vaccines globally.”
When it became clear to the US business lobby that they could not affect the US position in support of an intellectual property waiver, the industry looked to Europe and the UK, which they saw as more receptive. As negotiations ramped up, the US Chamber of Commerce and US pharmaceutical lobbyists including the Pharmaceutical Research and Manufacturers of America (PhRMA) and the Biotechnology Innovation Organization (BIO) met the European Commission to lobby against the waiver. The UK’s biotech lobby met with George Freeman, a science minister, “to discuss intellectual property and the life sciences sector.”
Between January 2020 and September 2022, 13 pharmaceutical lobby groups and companies held nearly 100 meetings with the most senior European Commission officials. In the U.K., there were more than 360 meetings between January 2020 and March 2022 — equivalent to nearly one every two days. Boris Johnson personally attended 11 of them.
In the EU during 2021, COVID vaccine and treatment developers including Pfizer and Moderna and the largest pharma lobbying groups, including the EFPIA, spent at least €15 million on lobbying. The year before, the companies spent more than €15.7 million. In 2019, their lobbying costs were €13.9 million, according to data analyzed from LobbyFacts.
Major industry players also paid at least 31 private consultancies to lobby the Commission on their behalf. AstraZeneca and Johnson & Johnson each paid around €700,000 in 2021 for consultancies working on topics such as the EU vaccines policy and the bloc’s strategy for COVID-19.

Responding, Max Lawson, Co-Chair of the People’s Vaccine Alliance and Head of Inequality Policy at Oxfam, said:

“These shocking allegations are a testament to the huge unaccountable power of big business in global politics. Pharmaceutical companies were seemingly granted unfettered access to the European Commission and the British and German governments, while countries that supported measures to improve vaccine access faced threats from the industry. When US lobbyists couldn’t influence the US government, they turned to the EU and UK. This is not how life and death decisions should be made.

“Millions died without access to vaccines while pharmaceutical companies gouged extraordinary profits from the pandemic. Rich countries expressed warm words and pledged donations, but to Germany, the UK, Switzerland, and the European Commission, it was apparently just a PR exercise. In the end, global solidarity was snuffed out by the wealthy pharmaceutical lobby, which is not how a healthy democracy should function.

“There is, however, a glimmer of hope amid these revelations. The narrow outcome of TRIPS negotiations set an important precedent, recognising that intellectual property rules are a barrier to accessing medical tools. World Trade Organisation members are now deciding whether to extend the decision to cover tests and treatments. That could ensure that everyone, everywhere has access to lifesaving medical tools that reduce COVID-19 hospitalisations and death. While big pharma will once again use all of its lobbying might to protect its medical monopolies, governments must ensure this time that they put people’s lives before profits.”

Oxfam reacts to NZ Government’s biofuel obligation

November 9, 2022

The Government’s biofuel obligation risks doing more harm than good for the climate and global hunger, said Nick Henry, Climate Justice Lead at Oxfam Aotearoa:

“We welcome the decision to rule out the use of palm and soy oil and to limit the use of food and feed to produce biofuel. But this does not go far enough. As our recent briefing paper details, all crop-based biofuels contribute to the increasing levels of hunger across the world.

“Under a similar system in the EU, Europe is burning 17,000 tonnes of rapeseed and sunflower oil per day – the equivalent of 19 million 1L bottles every day – that could be used for food. What’s more, if the Government move ahead with its mandate, it will contribute to land use changes around the world which are extremely harmful to local communities and to the climate.

“Minister Woods is clearly committed to managing the impacts of transport on the environment. We acknowledge changes have been made to improve the biofuel obligation, but it is crucial Minister Woods goes further to reduce the serious harm a biofuels obligation can have on people and planet. The Government must rule out using any food crops and have strict standards to not only protect the environment, but also human rights.

“We look forward to working with the Government to inform and improve its approach to sustainable transport.”

/ENDS

Notes

Oxfam Aotearoa briefing paper on biofuels: https://www.oxfam.org.nz/wp-content/uploads/2022/10/Dont-Burn-Food-Policy-Briefing.pdf

According to the European Federation for Transport and Environment, 18 percent of the world’s vegetable oil production goes to biodiesel. Nearly all of this is fit for human consumption. In recent years, Europe put 58 percent of all rapeseed and 9 percent of all sunflower oil consumed in the region into its cars and trucks. See: https://www.transportenvironment.org/discover/food-vs-fuel-europe-burns-19-million-bottles-of-sunflower-and-rapeseed-oil-every-day-in-cars/

COP27: Oxfam reacts to NZ Government’s loss & damage announcement

November 9, 2022

Oxfam Aotearoa welcomes and congratulates the NZ government’s recognition that loss and damage exists and requires funding, but Jo Spratt, Communications and Advocacy Director says it still isn’t good enough:

“Sadly, this is not new funding. Instead, it is allocated from New Zealand’s existing climate finance, which is for adaptation and mitigation. Financing for loss and damage must be new and additional to adaptation, mitigation and overseas aid funding. There is a severe funding shortfall – countries are suffering irreversible damage in the climate crisis.

“To put it into perspective, last month Oxfam revealed that 55 of the most climate-vulnerable countries have suffered climate-induced economic losses totalling over half a trillion dollars during the first two decades of this century.

“While New Zealand is amongst the leading countries in providing dedicated funding for loss and damage, two further steps are necessary to clearly demonstrate our commitment to the Pacific. First, New Zealand must back-up this announcement by supporting a new loss and damage finance facility to help ensure that finance to address loss and damage is accessible and sustained and is delivered in accordance with the principles of climate justice. Second, New Zealand can pledge this $20 million allocation to the new facility.”

ENDS

A billionaire emits a million times more greenhouse gases than the average person

November 8, 2022

Billionaire investments in polluting industries such as fossil fuels and cement double the average for the Standard and Poor group of 500 companies – Oxfam

The investments of just 125 billionaires emit 393 million tonnes of CO2e each year – the equivalent of France – at an individual annual average that is a million times higher than someone in the bottom 90 percent of humanity.

Carbon Billionaires: The investment emissions of World’s richest people, is a report published by Oxfam today based on a detailed analysis of the investments of 125 of the richest billionaires in some of the world’s biggest corporates and the carbon emissions of these investments. These billionaires have a collective US$2.4 trillion stake in 183 companies.

The report finds that these billionaires’ investments give an annual average of 3m tonnes of CO2e per person, which is a million times higher than 2.76 tonnes of CO2e which is the average for those living in the bottom 90 percent.

The actual figure is likely to be higher still, as published carbon emissions by corporates have been shown to systematically underestimate the true level of carbon impact, and billionaires and corporates who do not publicly reveal their emissions, so could not be included in the research, are likely to be those with a high climate impact.

“These few billionaires together have ‘investment emissions’ that equal the carbon footprints of entire countries like France, Egypt or Argentina,” said Nafkote Dabi, Climate Change Lead at Oxfam “The major and growing responsibility of wealthy people for overall emissions is rarely discussed or considered in climate policy making. This has to change. These billionaire investors at the top of the corporate pyramid have huge responsibility for driving climate breakdown. They have escaped accountability for too long,” said Dabi.

“Emissions from billionaire lifestyles, their private jets and yachts are thousands of times the average person, which is already completely unacceptable. But if we look at emissions from their investments, then their carbon emissions are over a million times higher,” said Dabi.

Contrary to average people, studies show the world’s wealthiest individuals’ investments account for up to 70 percent of their emissions. Oxfam has used public data to calculate the “investment emissions” of billionaires with over 10 percent stakes in a corporation, by allocating them a share of the reported emissions of the corporates in which they are invested in proportion to their stake.

The study also found billionaires had an average of 14 percent of their investments in polluting industries such as energy and materials like cement. This is twice the average for investments in the Standard and Poor 500. Only one billionaire in the sample had investments in a renewable energy company.

“We need COP27 to expose and change the role that big corporates and their rich investors are playing in profiting from the pollution that is driving the global climate crisis,” said Dabi. “They can’t be allowed to hide or greenwash. We need governments to tackle this urgently by publishing emission figures for the richest people, regulating investors and corporates to slash carbon emissions and taxing wealth and polluting investments.”

The choice of investments billionaires make is shaping the future of our economy, for example, by backing high carbon infrastructure – locking in high emissions for decades to come. The study found that if the billionaires in the sample moved their investments to a fund with stronger environmental and social standards, it could reduce the intensity of their emissions by up to four times.

“The super-rich need to be taxed and regulated away from polluting investments that are destroying the planet. Governments must put also in place ambitious regulations and policies that compel corporations to be more accountable and transparent in reporting and radically reducing their emissions,” said Dabi.

Oxfam has estimated that a wealth tax on the world’s super-rich could raise US$1.4 trillion a year, vital resources that could help developing countries – those worst hit by the climate crisis – to adapt, address loss and damage and carry out a just transition to renewable energy. According to the UNEP adaptation costs for developing countries could rise to US$300 billion per year by 2030. Africa alone will require US$600 billion between 2020 to 2030. Oxfam is also calling for steeply higher tax rates for investments in polluting industries to deter such investments.

The report says that many corporations are off track in setting their climate transition plans, including hiding behind unrealistic and unreliable decarbonisation plans with the promise of attaining net zero targets only by 2050. Fewer than one in three of the 183 corporates reviewed by Oxfam are working with the Science Based Targets Initiative. Only 16 percent have set net zero targets.

Ahead of the deliberations at COP27, Oxfam is calling for the following actions:

Governments to put in place regulations and policies that compel corporations to track and report on scope 1, scope 2 and scope 3 GHG emissions, set science-based climate targets with a clear road map to reducing emissions, and while at it ensuring a just transition from the extractive, carbon intensive economy by securing the future livelihoods of workers and the affected communities.
Governments should implement a wealth tax on the richest people and an additional steep rate top-up on wealth invested in polluting industries. This will reduce the numbers and power of rich people in our society, drastically reduce their emissions. It will also raise billions that can be used to help countries cope with the brutal impacts of climate breakdown and the loss and damage they incur and fund the global shift to renewable energy.
Corporations must put in place ambitious and time-bound climate change action plans with short-to-medium term targets in line with global climate change objectives in a view to reach carbon neutrality by 2050.

“To meet the global target of keeping warming below 1.5 degrees Celsius, humanity must significantly reduce carbon emissions, which will necessitate radical changes in how investors and corporations conduct business and public policy,” said Dabi.

Notes:

Download Oxfam’s report “Carbon Billionaires”.

Oxfam began with a list of the 220 richest people in the world according to the Bloomberg Billionaires Index and worked with data provider Exerica to identify a) the percentage ownership these billionaires held in corporations b) the scope 1&2 emissions of these corporations. To calculate the investment portfolios of individual billionaires, we used the analysis by Bloomberg, who provide detailed breakdowns of the sources of billionaire wealth. Here is the methodology note.

The estimate on the money that could be raise on wealth tax on millionaires, multi-millionaires and billionaires, is through using data from Wealth X and Forbes.

Recent data from Oxfam’s research with the Stockholm Environment Institute shows that the wealthiest 1 percent of humanity are responsible for twice as many emissions as the poorest 50 percent and that by 2030, their carbon footprints are set to be 30 times greater than the level compatible with the 1.5°C goal of the Paris Agreement.

The GHS protocol greenhouse accounting standards widely used globally spells out the three categories of gas emissions associated with companies as follows: Scope 1 are direct emissions from the company’s operations. Scope 2 are indirect, where the emissions take place elsewhere. Scope 3 are all other indirect emissions, this includes everything from emissions in the company’s supply chains to employee commuting, to the use of the products they sell by consumers.

Little for developing countries to cheer about in climate finance report

November 1, 2022

In response to the US$100bn climate finance progress report, by Canada and Germany on behalf of the donor countries published today, Nafkote Dabi, Oxfam International Climate Policy Lead said:

“While this report provides helpful information on various actions to advance the climate finance agenda, it fails to boost confidence that developed countries will make significant and swift progress on meeting their commitment to provide US$100 billion annually, over 2020-2025 to assist poor countries. The report would have been an ideal moment for developed countries to spell out how they will compensate for missing the US$100 billion mark earlier through additional climate finance in subsequent years. Also, it lacks a robust roadmap as to how they’re going to double adaptation finance by 2025, something they agreed to at COP 26.”

“Poor countries who are worst affected by this climate crisis will find little here to cheer. Countries in Asia, East and West Africa are experiencing more frequent and more severe impacts of climate change, and they have done little to cause it, and they are least prepared to cope with it. That’s why these financial pledges to them are so important. Their citizens are struggling now to cope with catastrophic climate-induced disasters such as droughts, floods, and unpredictable rainfall, which have reduced food production, resulted in water shortages, destroyed livelihoods, and displaced millions.”

“To make matters worse, rich contributors gave more than 70 percent of their climate finance in the form of loans in 2020. This means that poor countries are being loaded up with more debt to pay for climate damage. And even though rich countries claim to have mobilised around US$83 billion in climate finance in 2020, of which US$68 billion they claim was provided as public climate finance, recent Oxfam analysis shows that the actual support provided was just a third of what the reported figures for public finance suggest.”

“At the upcoming COP27 in Egypt, developed countries must address this glaring gap by committing to significantly increase grant-based finance, something that developing countries have long been calling for.”