Sustainable Businesses in the Post-pandemic World

Stephen DeAngelis

July 01, 2020

When the world shutdown as a result of the novel coronavirus pandemic, many urban areas experienced something they hadn’t seen for years — clean air and clear skies. This turn of events demonstrated how quickly human activity can change the environment in which we live. Experiencing clean air and clear skies had many people wondering why politicians and business leaders were quick to respond to the pandemic but have been slow to counter climate change. Energy and climate reporter Amy Harder (@AmyAHarder) writes, “Climate change and the coronavirus have a lot more in common than the letter C, but their differences explain society’s divergent responses to each. … Pandemics and climate change are both massive risks that much of the world is ignoring or downplaying.”[1] The consequences of ignoring or downplaying risks can be catastrophic. Ingrid Sidiadinoto (@isidiadinoto), Senior Director of Global Solutions at UPS, asserts, “When people talk or think about sustainability, they often consider activities related to becoming more environmentally friendly. And while this is undoubtedly a good start, if we’re going to talk about true, long-term sustainability, we need to look at the bigger picture.” Both pandemics and climate change require looking at the bigger picture.

Differences between pandemics and climate change

Since the novel coronavirus pandemic is the worst pandemic the world has seen in a century, some pundits refer to it as a black swan (i.e., rare) event. Harder believes the pandemic and climate change are gray rhino events. She explains, “A gray rhino is a metaphor coined by risk expert Michele Wucker to describe ‘highly obvious, highly probable, but still neglected’ dangers, as opposed to unforeseeable or highly improbable risks — the kind in the black swan metaphor.” Scientists have for years warned us about the dangers of both a pandemic and climate change. Unfortunately, too many politicians and business leaders have ignored or downplayed the scientific evidence for both scenarios. Harder believes one of the biggest differences between the pandemic and climate change is the timeframe during which they occur. She explains, “The pandemic will define our generation uniquely, while climate change will wear on for many. The word ‘crisis’ implies a finite beginning and end, which certainly fits the bill of the pandemic. At some point, just like past pandemics, this coronavirus will likely recede, become normalized or be resolved with a vaccine. I don’t use the word crisis to describe climate change because humanity is going to be living with impacts of a warming world indefinitely even if we do drastically reduce heat-trapping emissions. It doesn’t have finite parameters that typically define crises.” Among the things they have in common is that they both threaten public health and they both have long-term impacts on business.

Much has been written about what the world needs to do to emerge from the pandemic.[3] Environmentalists hope businesses take advantage of the restart to enhance their sustainability efforts. McKinsey & Company analysts note, “Amid the coronavirus pandemic, everyone is rightly focused on protecting lives and livelihoods. Can we simultaneously strive to avoid the next crisis? The answer is yes — if we make greater environmental resilience core to our planning for the recovery ahead, by focusing on the economic and employment opportunities associated with investing in both climate-resilient infrastructure and the transition to a lower-carbon future.”[4] Akanksha Khatri (@Akanksha_Khatri), Head of the Nature and Biodiversity Initiative at the World Economic Forum, agrees businesses can emerge from the pandemic with a better plan for saving the environment. “As we are facing an unprecedented planetary emergency,” she writes, “businesses have an important role to innovate and advance solutions for a nature-positive economy and society. … By realizing how nature-loss is material to their operations and growth models, businesses can and must be a key part of the solution. As the trend for greater transparency and accountability continues, costs are likely to rise for businesses which have not begun to include nature at the core of their enterprise operations. … The next steps are to identify the areas where strategic transformation of current business models can contribute most to halting and reversing nature loss, and the ways to finance this transition.”

Sustainability as a business objective

The path to a more sustainable future is going to be neither cheap nor easy. That’s why so little action has been taken to date. Governments and businesses are not the only entities to blame. Consumers are also part of the problem. ElMarie Hugo, an industry and supply chain leader at Blue Yonder, explains, “Today’s headlines are filled with disheartening news about climate change, resource depletion, pollution, hunger, access to clean water, and poverty. The world is paying a high price for the traditional ‘take, make, use, waste’ philosophy that failed to consider the long-range social and environmental consequences of mass consumerism.”[6] All sorts of plans have been put forward to change the course the world seems determined to pursue; however, no clear consensus has been achieved. Hugo notes, “In 2015 more than 190 countries joined to endorse 17 sustainable development goals (SDGs) ― defined by the United Nations ― as part of a worldwide public-private initiative called 2030Vision.” Although some politicians have ignored these goals and the science behind them, Hugo reports many companies are trying to help achieve them. She asserts, “Achieving these goals, which include more affordable energy and climate action, will not only enable companies to fulfill their moral and ethical responsibilities, but can help them capture their share of an estimated $12 trillion in annual revenues and cost savings.”

Sharon Thorne (@SharonThorneUK), Deloitte Global Board Chair, agrees some companies are becoming more sustainable and are transforming because it is in their own best interests to do so. She writes, “Executives are increasingly concerned about climate change, and many say their companies have begun to take action. New research from Deloitte found that 90% of executives surveyed for its 2020 Industry 4.0 Readiness Report agree the effects of climate change will negatively affect their organizations, and 48% believe tackling climate change is a top responsibility for the current generation of leaders.”[7] However, Thorne notes, “Progress is not occurring fast enough. Urgent action is needed now to change the current trajectory.” Hugo insists emerging technology can help companies achieve sustainability goals. She explains, “As supply chain software increasingly connects all trading partners and leverages AI to support sustainable decision making across the supply chain, today every business can contribute to the goals of 2030Vision. Armed with connectivity, control, autonomy and a spirit of collaboration, today’s globally complex, end-to-end supply chains can make the right decisions, to become true environmental and social champions.”

Concluding thoughts

It will be interesting to see whether business leaders emerge from the pandemic with a new appreciation of sustainability goals or return to business as usual. Thorne concludes, “The mandate for stronger diversity, inclusion, and environmental sustainability efforts has never been clearer, both from a societal and a business perspective. On climate change, the wildfires destroying significant parts of Australia are just the latest wake-up call to the urgent need for collective action from government, businesses, and whole communities. As evidenced by this year’s Readiness Report findings, leaders understand that climate change is an existential threat, and they are increasingly concerned about the longer-term impacts to their operations. At the same time, it’s also clear that most companies have yet to translate that insight into significant action.” In one of Michael Jackson’s hit songs, he wrote, “I’m starting with the man in the mirror. I’m asking him to change his ways. And no message could have been any clearer. If you want to make the world a better place, take a look at yourself, and then make a change.” Individuals, companies, and governments should do just that and begin to make the change towards a better environment.

Footnotes
[1] Amy Harder, “Your guide to comparing climate change and coronavirus,” Axios, 1 June 2020.
[2] Ingrid Sidiadinoto, “A 2020 vision for a sustainable future,” Longitudes, 16 April 2020.
[3] See, for example, my two-part article “Looking Ahead: Easing Out of Crisis and Recession, Part 1/Part 2,” Enterra Insights, 20-21 April 2020.
[4] Kimberly Henderson, Dickon Pinner, Matt Rogers, Bram Smeets, and Daniela Vargas, “Climate math: What a 1.5-degree pathway would take,” McKinsey & Company, 30 April 2020
[5] Akanksha Khatri, “5 reasons why CEOs must care about safeguarding nature,” World Economic Forum, 25 February 2020.
[6] ElMarie Hugo, “Make Your Supply Chain a Sustainability Champion,” Logistics Viewpoints, 13 February 2020.
[7] Sharon Thorne, “Time to Shift From Concern to Action on Climate, Inclusion,” The Wall Street Journal, 31 January 2020.