Introduction

The report updates evidence showing that rising income and wealth inequality is linked to widening environmental, social and health problems across 22 high-income democracies. Since 2009, austerity and weakened public services have exacerbated disparities. Wealth concentration has grown sharply; in the UK, the richest 52 families now hold more wealth than the bottom 50% of the population. New indices show strong correlations between inequality and aggregated health, social and environmental harms. The report identifies inequality as a structural driver of social stress, reduced cooperation and higher long-term societal costs.

Section 1: Inequality is central to the climate crisis

Inequality increases consumption pressures and drives carbon-intensive lifestyles among high earners. Globally, the richest 1% emit as much greenhouse gas as the poorest 66%. The richest 10% generate over half of emissions, with the share rising in more unequal countries.

More equal nations achieve higher recycling rates (e.g., Germany recycles over 45% of municipal waste versus Portugal’s 13%) and lower PM2.5 air pollution exposure. Lower-income groups face higher pollution despite contributing least to it. Public willingness to prioritise environmental protection over economic growth is 10–20 percentage points higher in equal societies.

The report argues that reducing inequality, limiting carbon-intensive consumption and reshaping economic objectives beyond GDP are essential for climate action.

Section 2: Inequality erodes social cohesion

Income inequality reduces trust and increases polarisation. Under 20% of people in Greece and Portugal believe most others can be trusted, compared with 60–70% in Scandinavian countries. Concentrated wealth undermines democratic governance, with affluent groups exerting disproportionate influence. Racial and gender inequalities intensify in unequal contexts due to structural and institutional barriers.

Homicide rates correlate strongly with inequality, with the US rate 34 times higher than Japan’s. Imprisonment rates are also significantly higher in unequal countries, driven mainly by harsher sentencing. Mental health stigma is greater where inequality is high, and perceptions of equal opportunity decline accordingly.

Section 3: Inequality prejudices the life chances of children and young people

Child wellbeing is lower in unequal countries; Denmark performs best, while the US, UK and New Zealand rank lowest. Educational underachievement is closely linked to family income. More than 40% of 15-year-olds in Israel, Italy, Greece and the US lack basic reading and maths skills, compared with 22% in Finland and Ireland. Educational inequality widens where income disparities are larger.

Teenage birth rates are higher in unequal countries, reflecting constrained opportunity. Spending parity for young children is lower in unequal societies, limiting early development support. Social mobility declines as inequality rises, with Denmark, Norway and Finland performing best and Greece, Italy and Spain worst.

Section 4: Inequality determines population health and wellbeing

Infant mortality is significantly lower in more equal countries; the UK and US have more than double Finland’s rate. Excess COVID-19 deaths were higher where inequality and mistrust in institutions were present. Chronic conditions such as diabetes, asthma and obesity are more prevalent in unequal countries. Mental illness rates follow a similar pattern, with more than one-quarter of adults in the US reporting a mental illness in the previous year, compared with below 10% in Japan, Italy and Spain.

Section 5: Key recommendations

The report calls for governments to reduce income and wealth inequality as a central policy priority. Recommendations include implementing the socio-economic duty; introducing progressive wealth, inheritance and capital taxes; strengthening tax enforcement; and closing loopholes and tax havens.

It also proposes transforming social security systems; investing in community wealth building; expanding universal basic services; improving early years and education funding; regulating housing markets; supporting co-operatives and worker participation; and embedding wellbeing, inclusion and participatory governance in policy design. These measures aim to reduce structural disparities and enable healthier, safer and more sustainable communities.