'What impact will the COVID-19 crisis have on sustainability' report for 'From Vision to Action'
The Roundtable for Leading Sustainably is a monthly exploration of the practical implications of sustainability in the business context hosted by Read the Air and Temple University, Japan Campus (TUJ). For the past year, the Roundtable has lead a series of discussions called "From Vision to Action: Sustainability in Business" that brings together key thought leaders from business, academia, the financial world, policy makers and civil society to investigate different aspects of sustainability in the business context, with particular emphasis on Japan and Asia. A report on the initial findings of the "From Vision to Action-Sustainability in Business" series, will be available this summer. If you would like to be notified of its publication, please email email@example.com or submit your email address here.
In response to the onset of the COVID-19 crisis, we decided to address our sixth session of the Roundtable on Leading Sustainably to how sustainability practices in businesses would be impacted by the pandemic. Naturally, too, we would have to gather online, instead of in person at TUJ, in a virtual summit.
Our concerns on the subject at the time were two-fold: 1. that there was little clarity about how companies' sustainability experts were responding and how businesses were using their sustainability resources to whether this storm; and 2. would the response to and recovery from the pandemic slow down the progress that has been made in companies and investors more robustly embracing sustainability to improve their business decision-making and strategies.
And our suspicion, based on our work with clients and the research that we conducted for our upcoming book from Routledge, "Leading Sustainably-The path to sustainable business and how the SDGs" changed everything, was that companies with mature sustainability programs were better positioned to handle and survive this unusual crisis, and that ESG/sustainable investing portfolios were more secure in a chaotic market. But we wanted to test this suspicion by speaking with other experts first.
We approached Dr. Mark Milstein, Director of Cornell University's Center for Sustainable Global Enterprise, Annette Stube former Maersk Group Chief Sustainability Officer and board member at Finish green energy firm Fortum and Eliza Eubank, Global Head, Environmental and Social Risk Management at Citi, to hear their perspectives on how things were unfolding, in particular from the perspective of corporate sustainability and finance. We then discussed their insights with Heather Clancy, Editorial Director of GreenBiz. In fairness to all the contributors, each raised the point that these are early days, so it is hard to tell long term how things play out.
We also conducted a survey of how businesses thought that their sustainability stance might change in the new future. Let's start there.
Session Outputs for April 27, 2020
The majority of respondents to the survey believed that the level of focus on sustainability in their companies would remain the same (40 percent) or increase (30 percent), though most though that the priorities would change (57 percent).
Majority too thought that resources such as budgets and people would remain the same (36 percent) or increase (28 percent) over the next 6 to 12 months, for a total 64 percent. A sample of the responses for how priorities might changed are shown below.
Business Perspective: How the COVID-19 crisis is impacting Sustainability
'RESPONSE' (in brief)
Dr. Mark Milstein is Director of the Center for Sustainable Global Enterprise and Clinical Professor of Management and Organizations at the Johnson Graduate School of Management at Cornell University. Mark was working with 27 students on seven projects with different companies before he onset of the COVID-19 crisis. In his recent communications with those companies, while he sees them trying to quickly respond to difficult situations with managing their supply chains and handling their workforce fairly, they are at the same time not taking their eye off the ball when it comes to sustainability.
Annette Stube is the former Head of Sustainability at Maersk Group and a board member at Finnish clean energy company Fortum OYJ. She sees that companies that are well versed in the sustainability agenda have probably been able to adjust more quickly than others to the situation and offer services to help resolve problems because of their understanding of their own role in society. They have this better sense of their own responsibilities because they've listened to what governments and stakeholders in general have been asking them of them. She also thinks that companies will continued be judged on how well they manage this balance not only right now during the crisis, but also after it.
In her experience, you should always build sustainability programs that promote internal resilience by making a good business case for their existence, rather than just proposing to benefit society via "nice" philanthropic programs. Programs that make a good business case thus would never be considered for closure in times such these when the company is under great pressure.
'REIMAGINE' (in brief)
Eliza Eubank is the Managing Director and Global Head of Environmental and Social Risk Management at Citi bank. She thinks that the impact of the crisis will immediately be seen in how businesses do scenario planning, as they have started to with the Taskforce for Climate-related Financial Disclosures. For now these will be focused on COVID-19 type issues for business continuity, but this should translate into greater ability to do scenarios around climate change and its impact on businesses.
She also believes that once we're through this pandemic, sustainable finance products such as green, social, and sustainable bonds could pick up as a way for companies who have weathered the storm to communicate externally a solid goal and and gameplan for how they will improve the sustainability of their operations.
— Next steps
Find more materials on innovation and how businesses are embracing sustainability at the 'Vision to Action' Resource Center
Read the Air—Trista Bridges and Donald Eubank are cofounders and principals of Read the Air, a Tokyo-based specialist advisory service that enables companies to put sustainability at the core of their business, for purpose and profit. Read the Air guides commercial enterprises in designing, implementing and executing powerful business strategies that create sustainable business models. Bridges and Eubank are also coauthors of the upcoming book from Routledge,"Leading Sustainably-The path to sustainable business and how the SDGs changed everything", out summer 2020.
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