According to a recent Oxfam and ActionAid research, 722 of the world’s largest firms have generated more than $1 trillion in windfall profits each year since 2021. Soaring energy prices and high loan rates aided their tremendous income increase. The 722 firms made $1.08 trillion in windfall profits in 2021 and $1.09 trillion last year, despite the fact that billions of people throughout the world lacked access to food and clean water.
According to the data, the average yearly earnings of the enterprises were found to be 89% greater than the average of the previous four years (2017 to 2020). Windfall earnings are defined as profits that exceed the average profits over the previous four years by 10%. Experts usually feel that windfall gains should be heavily taxed by governments around the world in order to redirect resources to where they are most needed.
Who made the most?
Pharmaceutical and energy businesses, as well as banks and food companies, are among the 722 corporations. Over the last two years, the 45 energy businesses on Forbes’ list of the 2,000 largest companies earned an average of $237 billion in windfall profits. This huge wealth development resulted in the birth of 96 energy billionaires with a collective fortune of approximately $432 billion.
Furthermore, in the last two years, 18 food and beverage firms made $14 billion in windfall profits every year, 28 pharmaceutical companies made $47 billion, and nine aerospace and defense industries made $8 billion in windfall profits. This was a time when over 250 million people in 58 countries faced extreme food insecurity and a high cost of living crisis.
‘The government must intervene’
Experts argue that global corporations’ avarice is causing widespread poverty and a cost-of-living crisis, particularly in rich countries. Katy Chakrabortty, Oxfam’s head of advocacy, said, “These eye-watering excess profits are not only immoral, but we are also seeing increasing evidence that a corporate bonanza is supercharging inflation, leaving millions of people in the UK and around the world struggling to pay their bills and feed their families.”
“When the windfall profits of 18 food and beverage corporations are more than twice the amount needed to cover the shortfall in life-saving assistance to tens of millions of people facing hunger in East Africa, it is clear governments need to act,” she added.
“We need to see windfall taxes introduced across the board and an end to this racket, where rich shareholders are rewarded at the expense of everyone else,” Katy Chakrabortty demanded.