The coronavirus (COVID-19) pandemic is having unprecedented impacts on businesses and communities across the world. Although the long-term implications of the crisis are uncertain, one thing is clear: disruption within our tightly connected global economy has dramatic real, local and personal impacts on business and community. How sustainability is imagined and practiced is being heavily influenced by this disruption.
Amidst any major disruption there are some positives and opportunities, and the coronavirus pandemic is no different. Some positive sustainability changes resulting from the coronavirus pandemic and the economic and social response have been well documented. There has been a reduction in global CO2e emissions during the coronavirus pandemic. At the peak of the lockdown it was estimated that global CO2e emissions were 17 per cent below 2019 average emission levels. The Himalayas became visible from India for the first time in 30 years due to a reduction in air pollution. The canals in Venice have cleared up after reduced tourism. There has also been an increase in awareness of the cause of pandemics. As people reflect on the responses to the coronavirus pandemic, it has also spurred conversations about sustainability in business. However, this conversation is not entirely new. Sustainability in business has been discussed at large, particularly since the launch of the UN’s 17 Sustainable Development Goals in 2016. What’s new about present conversations around sustainability centres on how the social and economic disruption of the coronavirus has disrupted thinking about business as usual. Disrupted thinking can be seen in 1) the challenge to be more sustainable through social responsibility and 2) the response to the disruption, by government and business, has shown that the ‘impossible’ is indeed possible.
In a pre-coronavirus world, working from home for all employees was ‘impossible’. Business meetings ‘needed’ to happen in person. And hosting conferences and large events online was largely unheard of. Liaising with interstate or international partners or clients in person was also deemed necessary, which meant air travel and therefore, carbon emissions. Economic recovery packages implemented by governments globally were unimaginable 6 months ago and surprisingly the packages are at odds with the philosophies of many governments. Over the last few months, the ‘impossible’ suddenly became possible.
That’s not to say that coronavirus pandemic has been free of negative environmental impacts. Large sustainability initiatives in business and government are being sidelined as there is a focus on economic recovery at all costs by many organisations. Consumption and waste have increased. There has been a surge in medical waste, an increase in packaged goods, a decrease in reusable products such as coffee cups due to fear of contagion, and domestic electricity use is also on the rise as more people work from home. However, as communities, business and government respond to the economic fallout of the pandemic, some trends are emerging indicating the future of sustainability in business.
Stepping into a more sustainable business world
Many businesses are using sustainability concepts and practices as an opportunity to respond to the crisis. Both businesses and communities are ramping up existing strategies and incorporating new strategies as a result of the response to the economic fallout of the coronavirus pandemic. Recent trends include:
- Increasing value placed on supporting local businesses linked to local communities.
- Stakeholder model of business – with societal purpose as a central mission – is outperforming typical shareholder business approaches. Anecdotal evidence shows that these businesses are performing better than old world business models during the coronavirus response.
- A focus on valuing staff enhances staff commitment to the organisations in times of crisis.
- An ‘insulation’ of the supply chain is occurring as businesses move to support local producers.
- Organisations showing leadership in anchoring their business in environmental protection and social responsibility at a time when many governments are pursuing policies of growth at all cost.
- The growth in responsible and ethical investments will continue to rise especially post coronavirus pandemic given that communities will increasingly value social connectivity.
- Longer term shift in work practices have positive social, environmental and economic impacts (flexible home-work arrangements as well as increasing acceptance of virtual meetings and conferences)
- A shift in appreciation towards essential workers, which may lead some countries to increase funding to industries such as healthcare, education, waste handling, etc.
- Many governments are framing economic recovery plans with green economy policies (including circular economy). This has major implication for businesses involved in sustainability-related services and products.
Many of these trends were evident pre-coronavirus pandemic. However, one clear emerging trend is that responsible businesses are more resilient in the face of crises, particularly for those whose suppliers and manufacturers are based closer to where they conduct their business operations. Evidence shows that companies with suppliers in multiple countries have faced major disruption to product supply in the face of the coronavirus pandemic. On the other hand, for a socially responsible company with local supply chains, the impacts of the coronavirus pandemic were less dramatic. Local supply chains also impact on the operational expenses of sustainable businesses, reducing the cost of transportation and shipping-related costs, as well as emissions. Furthermore, many socially responsible businesses may also be reaping the benefits of previous sustainability-related investments (e.g. solar panels and electric vehicles). In the face of reduced revenues as a result of coronavirus pandemic, these measures have been helpful in cushioning the impact on the business’ bottom line.
Socially responsible businesses have appeared to require less adaptation to business operation during the coronavirus pandemic. For example, many socially responsible businesses already had flexible arrangements for their staff (including work-from-home), or they were already making use of online technologies and limiting work travel. As such, it seems the transition to these arrangements as part of coronavirus pandemic restrictions was easier for these businesses, whereas others without these arrangements required a longer time and effort to adapt to workplace changes. Lastly, socially responsible businesses typically have a thoughtful value proposition to their consumers, with their products tied to sustainable or social values. As a result, they attract consumers who identify with that value and have, in the face of adversity, continued purchasing from that business. Although there is still a great deal of uncertainty about how business and economies respond systemically to deeper sustainability imperatives, it is heartening to see some emerging positive trends in the response to the coronavirus pandemic.
Vanessa Taveras Dalmau, Sustainability Officer, Griffith Business School and Dr Rob Hales, Department of Business Strategy and Innovation and Director Griffith Centre for Sustainable Enterprise.