Covid-19 Pandemic: Sustainability's moment of truth

BY PIYUSH SHARMA

For the immediate, Covid-19 is perhaps the medium. But the message for the long term is clearly of sustainability

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“There are decades where nothing happens, and there are weeks where decades happen,” said Vladimir Lenin. The Covid-19 crisis is not a dress rehearsal; it serves as a moment of truth for the sustainability agenda, addressing longer-lasting and irreversible impacts of an expanding range of environmental, social and governance (ESG) challenges. Of these, environmental issues justifiably succeed in cornering the larger share of voice.

While the Covid-19 crisis will pass sooner or later, it will change some things forever. The pandemic has demonstrated that a leadership vacuum exists at all levels—corporations, governments, individuals, experts and technology. The threat of existential risks is no longer playing on Netflix. A real rekindling of interest in saving humanity from such threats will have implications and a marked shift in the basic expectation of the role and value of each member of society.

The societal expectations of businesses are changing. In a post-Covid world, with consumers favouring businesses and brands with purposes that benefit the broader community, norms of transparency, disclosure, collaboration and values might assume a transformed meaning.

CSR has ended up becoming a heady cocktail of benevolence, employee engagement, climate change, education, health and investor relations. Investor pressure will force accountability to CSR initiatives, employee benefits, supply-chain management, sustainable business models and other ESG priorities.

Shareholder value aside, businesses will increasingly align actions to collaborate with governments, as the paradigms are redefined around the relationship dynamics of the corporation.

The pandemic is a 101 course in resiliency, a word much in vogue these days—for individuals, ]businesses, state infrastructure and for supply chains. The new playbook will have to feature adaptability to known scenarios, and resilience to unexpected ones. Risk assessments need to account for both climate-related and health-related challenges, besides others.

The situation leaves one wondering about counter-intuitive measures such as a companies forcing employees to continue reporting to work, despite contrary government orders. Going forward, corporate governance will find a new normal. Investors will insist on disclosures regarding not only dividends and share buybacks but also around workforce structure, supply chains and importantly, sustainability issues. Boards will need to become responsive to the needs of stakeholders as well as those of the environment; consumer intolerance for under-preparation for, say, emissions, may emerge as the new normal.

At a basic human level, these are the lessons to be learnt from the Covid-19 pandemic:

1.    Timely action leads to containment and efficiency. Delayed action means overblowing of menacing proportions with associated challenges. Meeting the 2 degree Celsius target in the Paris accord is therefore imperative.

2.    Science and technology is an asset. Disrespecting obvious potential problems is plain stupid. Addressing policy issues and collaboration is key.

3.   

Human shortcomings exist not only at individual levels but collectively too. A VUCA crisis leads to ignorance towards attacking challenges. “Ignorance,” wrote Charles Darwin, “more frequently begets confidence than does knowledge.”

The pandemic throws challenges, threats and opportunities in equal measure, making sustainability harder in the short term. The opportunity is to rediscover urban habitat for humans and not for vehicles. The imperative is of a big, bold, and new green deal for states around the world.

Emissions may be falling, but perhaps not for long. Climate research may have taken a backseat with suspended field trials. Addressing these sustainability issues will need to break out of its classical cyclical character—rise during good times and drop during a downturn.

Many are reminiscing the 2008 financial crisis as a trailer of the emerging nightmarish face of the economy in a post-pandemic world. Sustainability issues deserve better than a slow-burn, no matter how urgent and grave the attention to immediate resource management objectives in the existential crisis. Ironically, a similar playbook may eerily play out with Covid-19 and climate change a few years later, if we collectively don’t get our act together right now. (First published in The Forbes)

The writer is an Executive-in-Residence at the Indian School of Business (ISB) besides being a global CEO coach