With companies struggling to maintain their footing in a COVID-19 world, the pandemic is helping executives envision the sustainability revolution that lies ahead. According to Bain, top executives are using COVID-19 as an opportunity to “lean in” on sustainability, as the pandemic has highlighted the importance of critical environmental, social and governance (ESG) factors.
“If the past is any indication, sustainability will remain a top priority even as companies focus on survival,” Bain states, noting that during the last recession, many predicted that companies would deprioritize sustainability as a nonessential component of their business. “That didn’t turn out to be the case.”
For example, the National Association of Insurance Commissioners announced a new requirement in 2009 that U.S. insurers with annual premiums over $500 million disclose climate change risks and their policies for reducing this risk. Now, the UN Environment Programme Finance Initiative is encouraging approximately 200 financial institutions to sign onto a set of voluntary principles committing them to integrate environmental considerations into their business models.
“If, as some experts propose, degraded habitats are a partial cause of COVID-19,” Bain points out, “a likely outcome will be intensified global focus on environmental reparation.”
Time to Act Responsibly and Proactively
Bain predicts that many companies will use the current opportunity to “act responsibly and proactively to help their many stakeholders.” One group of four CEOs and the founder of the World Economic Forum (WEF) have issued a call to action, outlining six stakeholder principles for life after COVID-19 and urging WEF’s International Business Community group to sign on.
“JLL, a leader in real estate services, has confirmed social and corporate responsibility as one of its top priorities,” Bain states. “Companies as diverse as BP, Finnair, Barclays and Samsonite have committed to continue their push for carbon-neutral operations, despite the pandemic.”
In “Environmental leadership will be more in demand than ever after COVID-19,” Tableau Software’s Neal Myrick predicts that expectations around strong and well-thought-out environmental strategies will be even stronger post-COVID than they were before the outbreak.
“The health of the planet is inextricably linked to the health and wellbeing of people and businesses across the globe,” Myrick writes. “Leaders who are preparing to address both with strong strategies and decision-making will set their businesses and their people up for success in the future.”
Leadership on Environmental Sustainability
Pointing to a 2019 Deloitte study stating that more than 63% of businesses have formal resource and sustainability goals in place—and that more than two-thirds were hearing demands from customers to increase their commitment to good environmental practices—Myrick predicts that leadership on environmental sustainability will be in increased demand post-COVID.
“COVID-19 has already disrupted the way many businesses across the world operate,” he writes, noting that the data shows that where COVID-19 has spread, carbon dioxide emissions, air pollution, congestion and related transport emissions have significantly decreased. And while it’s highly unlikely that these declines will last, companies should be thinking about what they can do to avoid what Myrick calls the “bounce-back” effect of pollution spiking post-crisis.
To do their part, he says companies should ask themselves questions like:
- What policies can you carry through to protect the planet after the pandemic passes?
- Can you establish a clear work-from-home policy, where possible, across the company?
- Can you encourage green transportation options, like cycling and public transit, to keep emissions from commuting at low levels?
- Can you conduct an audit of your buildings to ensure that they’re operating at the highest efficiencies standards?
“Across sectors, these are big shifts to be contemplating,” Myrick writes. “But the coronavirus has already upended our business-as-normal. Leaders need to be thinking about the future and how to set us all up for success in our new reality.”
