Guest Blog: Sustainability movement will survive Covid-19

21 May 2020
SOURCE:
Nikki Wright, Managing Director, Wright Communications

The emergence and astonishingly rapid spread of the COVID-19 virus virtually brought the globe to a standstill.

It very quickly dominated the headlines and the lives of people in virtually every nation on the planet, with activities being halted, businesses closing, projects being shelved and communities shattered, as the disease quickly took its toll.

The heartbreak and fear arising from the pandemic has affected us all. But for environmentalists and the global sustainability movement, there was also a very real concern that COVID-19, or more particularly the global response to it, might halt the progress on sustainability issues – or even start to unravel the gains made in recent years – as sustainability initiatives were pushed to the backburners.

There was a very reassuring response to that notion, however, from a leading sustainability expert, voiced at the launch in May of the 2020 Corporate Reputation Index – a joint venture between Colmar Brunton, Kantar Research and Wright Communications.

Kantar Global Sustainable Transformation Practice Managing Director Jonathan Hall told the launch webinar audience that the sustainability movement needed to build resilience through the COVID-19 crisis, but that the will to push for more sustainable practices and policies had a momentum that would see it through the worst that the pandemic might bring.

Jonathan said it was important to see COVID-19 not so much as a disease – which was how the world saw and feared it - but as a disruption; viewing it in that light would help in planning how to respond. Disease, especially a brand new one, was a major unknown, but disruptions were nothing new – there had been 30 such major global interruptions to life in the last 20 years, and we knew how disruptions worked he said.

People tended to overestimate the long-term impact of changes when they were in the thick of the issue, Jonathan told the audience; things we feel are incredibly consequential in the moment, in time pass - and life moves on.  The key thing to remember from past disruptions was that they often cleared the way for trends that were already gaining pace and would emerge strongly through the disruption.

What was ripe for acceleration out of the pandemic was a shift from a focus on individuals – the person – to one on what was good for the public. In sustainability terms that was about brands not delivering a better self, but a better society.

Jonathan said corporations had come under pressure from all sides to develop and drive a sustainability agenda and sustainability issues had moved from obscure scientific journals into mainstream media as consumers, citizens and employees put business on the spot to shape up.

He cited former Unilever CEO Paul Polman who said sustainability wasn’t just the right thing to do but essential to drive business growth; by way of illustration of the growing place of sustainability in the economy, he pointed to the sustainable consumer packaged goods (CPG) market which was worth $US2.5 trillion annually. Polman also noted that the UK Government, as well as banks in England and France, had also said companies that failed to adjust to that new reality would eventually fail to exist.

High impact and likelihood

Any concerns that environmental and sustainability issues might be falling off the radar were also largely dispelled by the findings of the recent World Economic Forum’s Annual Global Risks Report from earlier this year. The Report mapped various issues facing businesses based on their impact and their likelihood, and the quadrant showing the most high-impact and high-likelihood issues was dominated by sustainability matters – climate action failure, biodiversity loss, extreme weather, natural disasters, and human-made environmental disasters.

The Report called the state of things “a planetary emergency” and said action was urgently needed to build resilience across communities and businesses.

Jonathan’s final trump card in his message of reassurance for sustainability sector managers was a ground-breaking document from the Harvard Business Review, The Comprehensive Business Case for Sustainability (2016), which revealed that following the 2008 financial crisis, companies committed to sustainability practices achieved above average performance in the financial markets – an average of $US650 million in incremental market capitalisation per company.

The study also showed that revenues from sustainable products and services grew at six times the rate of overall company revenues between 2010 and 2013, while the top 100 sustainable global companies experienced significantly higher mean sales growth, return on assets, profit before tax and cash flows than the rest.

As an example of how much sustainability can contribute to the bottom line, the Report cited Ikea’s line of sustainable products for homes which generates more than $US1billion annually.

The evidence strongly suggested that sustainability-focused organisations are more resilient, which is a heartening finding for the sustainability movement as it nervously endures the flurry of political and health responses to the pandemic.

New Zealand experience

Closer to home, it does feel as though some sustainability gains in the New Zealand marketplace have been eroded, such as increased use of packaging to provide food safety, the inability to use reusable cups for coffee at cafes under lockdown, and reduced use of public transport because of perceived health risks or possibly financial hardship. Some sustainability practitioners have also, sadly, lost their jobs in New Zealand during COVID-19 restructuring.

On the positive side, carbon emissions have reduced significantly from the reduction in air travel and car usage, and we can take great heart from the Government’s pledge of $1.1 billion on green projects including restoration of natural environments, biosecurity improvements, biodiversity initiatives and the creation of around 11,000 jobs in the regions.

There is no doubt business is going to prioritise the economic recovery but, in our experience, over recent weeks, companies are not turning the tap off sustainability projects. Those projects are inextricably linked to future economic prosperity – and that is all about selling NZ Inc.

Nikki Wright is the Managing Director of Wright Communications, which partners with Colmar Brunton and Kantar Research to produce the annual Corporate Reputation Index.