The world’s 722 biggest companies collectively are making more than $1tn a year (£780bn) in windfall profits on the back of soaring energy prices and rising interest rates, according to research by development charities.
The companies made $1.08tn this way in 2021 and $1.09tn last year, according to analysis of Forbes magazine data by the charities Oxfam and ActionAid. The collective profits were 89% higher than the previous four-year average covering 2017-2020.
Windfall profits are defined as those exceeding average profits in the previous four years by more than 10%.
Energy companies recorded the highest windfall profits. Of the 45 energy firms on Forbes list of the 2,000 biggest companies, they made on average $237bn a year in windfall profits in 2021 and 2022, according to the research.
The surge in energy profits has led to the creation of a total of 96 energy billionaires with a combined wealth of nearly $432bn – about $50bn more than in April last year.
Many food and beverage corporations, banks, pharmaceutical companies and retailers also reported a surge in profits during a cost-of-living crisis in which more than a quarter of a billion people in 58 countries experienced acute food insecurity in 2022.
Those profits have stoked accusations of “greedflation” – pushing through excessive price increases and driving up inflation.
The analysis found:
18 food and beverage companies made on average about $14bn a year in windfall profits in 2021 and 2022. Global food prices rose more than 14% in 2022.
28 pharmaceutical companies made on average $47bn a year in windfall profits, and 42 major retailers and supermarkets made on average $28bn.
Nine aerospace and defence corporations raked in on average $8bn in windfall profits
Katy Chakrabortty, Oxfam’s head of advocacy, said “These eye-watering excess profits are not only immoral, 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.
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“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.
“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.”