The Coronavirus has dominated headlines across the world over the past few months, leaving little room for other issues. However, the environment is a top concern for 52% of French people (Ipsos-Sopra Steria) and as EDHEC Finance Professor Gianfranco Gianfrate explains, Covid-19 actually makes corporate sustainability more relevant than ever.
The challenges of Covid-19 and climate change
Gianfranco Gianfrate has been working on climate change finance for over five years and he was struck by how similar responses have been towards the Coronavirus pandemic and climate challenges. “They are both global dramatic threats and policymakers and corporate leaders have been doing too little too late,” he explains. Adding that “the big difference is that the Coronavirus is likely to be tamed at some point whereas climate change is a long-term threat.”
For Gianfrate, the pandemic is another reason to encourage greater corporate sustainability. “The S in ESG investing refers to social factors that include health and safety. The companies that were quick to protect their workers are likely to experience the least disruption and recover the quickest”. He also notes that big tech companies have been fairly resilient to the crisis and are also doing well in terms of environmental performance. “The real challenge is leading and supporting the transformation of more traditional companies.”
The green-washing pitfall
There is growing interest and awareness in the way corporations address issues such as global warming and pandemics. Gianfrate emphasizes that “it is important to be ready to manage the complex reality of these global threats. Sooner or later each and every career will deal with the implications of climate change. In fact, investors and other key stakeholders expect to see how firms are minimizing any risks”. However, as Gianfrate explains “this can lead to ‘greenwashing,’ but this definitely doesn’t pay in the long-term.”
The EDHEC Professor has compiled eight top tips for responsible leaders who want to keep their competitive edge while committing to sustainability: