Coronavirus is making a (further) evident argument in favour of corporate sustainability. The “S” of ESG includes employees’ health and safety, and the companies around the world most responsive in protecting their workers in a pandemic outbreak are likely to experience less disruptions and recover the quickest.
Epidemics depend in many cases on the disruptions of ecosystems and involuntary mass migration determined by climate change. The coronavirus pandemic and climate change challenges actually show many similarities. They both are global dramatic threats to which policymakers and corporate leaders are doing too little too late. The (self-)denial of many heads of States in the first weeks of the coronavirus outbreak resembles – tragically –the contempt with which politicians are responding to global warming, even in the countries with more apparent sensitivity to environmental sustainability.
Business executives genuinely committed in making their operations sustainable while strengthening their competitive advantage, can get 8 takeaways from the current outbreak and the leadership – or lack thereof – showed by political leaders throughout the world.
You can’t manage what you can’t measure.
Reliable metrics are key to understand threats and think of solutions. This applies to pandemics, climate change and other sustainability issues. Reliable metrics more than narratives should inform decision making.
2. Science-based evidences
Seek expert advice and scientific knowledge. You don’t need to be a scientist yourself but you need to acknowledge what you don’t know, navigate the evidences produced by the scientific world, and get expert advice to interpret findings and, when necessary, weight contrasting opinions.
3. Effective communication
While metrics and science should inform your decision-making, fostering business sustainability requires a cultural change throughout organizations and their stakeholders’ ecosystem. Pervasive lasting behavioural changes need persuasive communication. The bruised faces of health workers fighting coronavirus, or the picture of shrunk glaciers are powerful communication tools expressing the urgency of the challenge.
The hyper-connected global society we inhabit moves according exponential rather than linear patterns. Timing is essential in managing risks when the costs of inaction grow exponentially.
You need to identify and build collaborations with stakeholders to achieve a common goal. Viruses and CO2 emissions don’t have a passport: only coordinated actions of nations can tackle their threats. Similarly, corporate leaders should consider allying with various stakeholders – including, competitors, employees, customers, investors, and suppliers – to foster their sustainability agenda.
6. Cost/benefit analysis
The metrics and science-based evidence should be translated into numbers for the corporate decisional tools, especially the financial ones. Eg what is the expected financial cost of not having an adequate Health&Safety policy in place? What is the EBITDA effect of a $100 carbon price?
Even the direst threat is likely to open up unexpected opportunities. Coronavirus is likely to have a lasting impact on homeworking and on-line education. Some manufacturing (ie automotive) companies quickly converted to the production of ventilators to help coping with the coronavirus; no surprise if they remain in the healthcare business after the solution of the pandemic.
8. Transparency/ greenwashing
Lack of transparency and deliberate greenwashing is proving short-lived in the current crisis. The short-term advantages of underreporting the contagion data, or of empty climate policies are backlashing in many countries. Companies and investors cannot expect to cheat on sustainability for a long time and without paying a cost for their behaviour.