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Don’t ignore sustainability because of COVID-19—it will be a differentiator now more than ever
COVID-19 has brought with it an undeniable need for action and for humanity to be at its best. But many are also worrying about COVID-19’s effect on the world’s capacity for addressing climate change, both in the near- and long-term. There are several reasons why the outlook for sustainable transformation isn’t great:
- Businesses are starting to heavily scrutinize upcoming capital investments and ongoing operating costs, with clean energy likely to take a hit;
- A delay to COP26 (the critical UN climate meeting scheduled for November 2020 in the UK) will likely push back the anticipated wave of political action;
- The intensification of nationalism worldwide will form a perfect storm with an enforced drop-off in climate activism (at least in the form of physical protest).
But this is not the time for business leaders to move away from sustainability; instead, it can be a differentiator now more than ever:
- Keep in mind the business value sustainability can offer (including the increased security that renewable energy investment can offer);
- Don’t let your sustainability standards slip by ignoring the regulatory action that will inevitably come after COVID-19 is defeated;
- Don’t underestimate the backlash you could bring on your business by using this pandemic as an excuse to ignore the climate crisis;
- On the flip side, consider the positive image and differentiation of simultaneously prioritizing sustainability and people’s wellbeing in a time of crisis.
Don’t let sustainability fall back into the realms of a “nice to have”
With capital funding for clean energy possibly under threat and business leaders tightening their operating costs, many firms and sectors will scrutinize just how vital their efforts to become more sustainable are. The oil and gas industry is an especially stark example that we’ve already covered, as it grapples with an oil-price crash off the back of the COVID-19 outbreak and a Saudi-Russia price war. This worrying change in tune might sweep through many industries and firms—but your business can’t be one of them.
The mindset of sustainability being costly or a “nice to have” has been a barrier for decades to any meaningful, sustainable transformation—even with “win-win” solutions that save money and carbon emissions, such as projects that reduce energy consumption. Recently this tune has changed, as the business value of sustainability became clear. Leaders must make sure they (at the very least) maintain their efforts to realize the business value of sustainability—if not doubling-down to secure their long-term viability in the currently heightened uncertainty.
Will COP26 go ahead? if you’re a business leader, that doesn’t matter —you shouldn’t be waiting for a push
We previously wrote that COP26 would bring a big regulatory swing and pressure to act, five years on from the Paris Agreement; the speculation of whether COP26 will go ahead doesn’t look set to disappear anytime soon, but all possible scenarios mean business leaders must keep sustainability high on their priority list:
- If COP26 does go ahead, but under a cloud of economic fallout from COVID-19, or even worse an ongoing pandemic, then expect more decisions and actions to be kicked down the road—you must be proactive and address sustainability without a regulatory push.
- If COP26 is postponed, then you and your business have even more time to get ahead of the curve.
- If COP26 is canceled and the next opportunity comes in Q4 2021, possibly in a country less likely to push the meeting to its boundaries, then the risk of drifting without meaningful regulatory change becomes a scary reality—there’ll be even more need for business leaders to be the pioneers.
Nationalism was intensifying even before COVID-19—you can’t expect wholesale change, whatever happens with COP26
Worldwide trends towards nationalism were worrying before COVID-19, but now they’re intensifying as countries close their borders and look increasingly inward, and this isn’t going to help the climate agenda one bit. Therefore, companies need to be pioneers were governments might fail; hopefully, the US’ elections will go ahead and lead to meaningful action on climate change, but even if this is the scenario, the economic fallout from COVID-19 will be a limiting factor and likely force climate down the priority list for many policymakers.
An unavoidable drop in public pressure means that regulatory help on sustainability becomes even more unlikely
As we all get used to social distancing measures, less physical activism (such as protests) is inevitable, thereby attracting less media attention and political pressure… although I’m sure groups like Extinction Rebellion will find a way!
This is for sure: business leaders don’t want to be caught out and shamed as looking for an excuse to ignore climate change, and there will be plenty of groups looking to call out leaders who do just that in the coming months! Turned on its head, there’s an opportunity for business leaders to stand out by intensifying their commitments to fighting climate change (with the obvious caveat of also prioritizing people’s welfare during the COVID-19 pandemic).
The Bottom Line: We’ll get through COVID-19, maybe within a year, but the same cannot be said for the climate crisis.
COP26 might not happen or may just be underwhelming, and business leaders will face increasing financial pressures. But this is not the time to look away from sustainability—risking a kneejerk post-virus regulatory reaction, and getting left behind by competitors who grasp this opportunity to differentiate themselves against those who choose to step back.