As businesses begin to recover from the COVID-19 crisis, optimistic headlines such as #BuildBackStronger and #GreenRecovery are trending. Will the drastic changes we’re facing today make companies think differently about how they move the needle for sustainability? On a recent webinar, VF Corporation, The We Mean Business Coalition and Schneider Electric sustainability experts discussed with an audience of around global 500 sustainability professionals how the current situation may impact goals in the short-term and what companies should consider in the long-term to solve the climate crisis. Let’s explore some of the most interesting findings from this conversation.
First, the good news: sustainability’s role is not deprioritized by the current crisis. In an audience poll, 41 % of attendees rated sustainability as very important for business continuity. This sentiment is echoed by many recent surveys such as futurenetzero’s recent reader survey showing 73% believe net zero plans have been accelerated by the current crisis.
The experts on the panel are also experiencing new openness in their own organization and across their network to re-think business practices and talk about opportunities for a more sustainable and resilient future.
VF confirmed this trend with their own story. The company has not slowed down any commitments—on the contrary, they see increased awareness of sustainability impact across their business due to the increasingly visible link between health and climate. In fact, the WHO reported in 2018 that climate change is expected to cause approximately 250 000 additional deaths per year by 2050 due to heat exposure, natural disasters, malaria or childhood malnutrition. The real experience of the current global health crisis could be the missing catalyst to drive action against these projections.
Short-term implications of disruption on sustainability goals
When is comes to short-term impacts of disruption to corporate sustainability programs, the picture as per audience vote is mixed. 42% already see impacts on near-term reporting and/or goals, while a large share of 46% of participants say it’s still too soon to tell.
At this point, the conversation shifted to the importance of transparency and continuity when it comes to short-term impacts. 2020 will surely be a year of ‘aberration’ that needs specific handling during reporting. While extended deadlines in reporting schemes will help to overcome some resources issues, it will be interesting to see what measures companies take to readjust their goals and account for avoided emissions from shutdowns. We Mean Business underlines the need for continuity in sustainability initiatives and talks about the growing momentum in sustainability goals, represented in many current government and business initiatives to rebuild their economies by pairing recovery action with climate action. The Build Back Better initiative is only one of many examples.
Building a resilient and sustainable future in the new normal
Long-term effects of the current crisis on sustainability will become more visible as time progresses. When asked to rate the anticipated impacts on long-term strategy, the audience answered with almost a 50/50 split between significant impacts or little to no impact.
This reflects VF’s insights, as they plan to keep course with their strategy, but acknowledge there must be a tightened engagement with stakeholders. As an example, shifts in consumer expectations on how companies should behave and what purpose and values they embrace will certainly remain a priority post-crisis. We Mean Business expects that future stakeholders will consider how companies responded to the current situation and whether they took the chance to rethink their business. Some direct reactions businesses in their networks are taking include reconsidered materiality analysis to prepare for future shocks, fostered collaboration across value chains and a great interest to innovate together on deep decarbonization strategies such as the use of hydrogen.
VF also emphasized the growing importance of value chains: factories producing for VF are now reopening and show continued interest in collaboration (e.g. by submitting current emissions data to the Sustainable Apparel Coalition). However, the reality of an economic downturn must be considered for future planning, and experts discussed influences on investments that might need new prioritization. The short-term price volatility in the energy markets is not expected to have big influence on the major strategies, as the effects will only be temporarily and there is simply no alternative to clean energy procurement for a just transition.
While all speakers expressed confidence in the strength of sustainability in the face of the current crisis, the audience brought up questions whether the approaches discussed will really move the needle. Exponential - not linear - increase in action is needed to tackle the climate challenge. While time only time will tell what approaches will be most successful, the experts shared digitization, supply chain action and technology breakthroughs (e.g. in energy storage) as trends that could elevate sustainability impacts to the next level. The learnings taken from today’s crisis should build the foundation for a sustainable transition.
Our speakers shared the following takeaways to guide companies through this uncertain time:
- Climate crisis isn’t taking a pause – neither should progress on sustainability goals
- Be transparent on your goal progress
- Re-evaluate your goals based off how your company has changed
- Restate goals if your business has been significantly impacted
- Align recovery strategies with overall sustainability mission
If you want to learn more, access the full webinar recording here.