Since the start of this pandemic there have been strong calls for both progress on sustainability to be maintained in the wake of massive economic and social disruption, and for that disruption to be seized upon as a chance to reset for the benefit of people and planet. Whilst it is still early days, there are enough signals now to identify trends that are likely to provide the context for the communication of corporate sustainability in the coming months.
1. The long-term focus on corporate sustainability hasn’t diminished
There were questions at the start of the pandemic whether this would be just like 2008 and all the momentum for sustainability would fade as the cold realties of recession took hold.
Back in 2008, it was mostly just the NGOs making the case not to cede ground, but this time it’s different. Calls for a ‘green recovery’ can be heard coming from investors, businesses and political leaders alike. Some of the most vocal supporters of this school of thought have been the oil and gas majors. Shell and BP are both talking about their businesses in a way that would have been unimaginable even a year ago, despite the twin blows of a global pandemic and volatility in the oil market. BP’s decision to write off $17bn of stranded assets was nuanced, but a big part of their story was that their future looks vastly different now they are commitment to net zero.
Beyond the headlines, there are several other signs that sustainability has permeated corporate strategies in a material way. For example:
Businesses should have a clear sense of how their peers, competitors and sectors are looking to strengthen their sustainability strategies coming out of the pandemic. They should also find out how the expectations of stakeholders have changed on sustainability issues.
2. The green recovery is becoming more than an idea
NGOs did a very good job early on of coalescing around the idea of a ‘green recovery’ and they built broad coalitions to advocate for it. Whilst those calls didn’t filter through to phase one stimulus packages (Bloomberg estimates that just 0.2% of phase one stimulus was green), things should look different in phase two stimulus plans, which are less acute and are designed take a longer-term view on where investment goes and what policies form around it.
Whilst the green recovery narrative has focused on public money and policy making, clearly there is a requirement and opportunity for private capital here too. A recent McKinsey study showed that a European country that commits €75bn to €150bn of public and private investment could yield €180bn to €350bn of gross value added, generate up to three million new jobs, and enable a carbon-emissions reduction of 15% to 30% by 2030. Unilever’s recently announced 1bn climate fund is perhaps the most striking example of a corporate investment in that direction.
For businesses, the green recovery will likely be an important framing for the foreseeable future. At next year’s COP26 industry engagement with the policy process could well be focused on how private capital can support green recovery aims.
3. The media is refocusing
Before the pandemic, publishers were increasingly dedicating teams and channels to covering sustainability and wider responsible business themes. A trend that has continued. The FT has seen great success with Moral Money, The New York Times created a dedicated climate desk and Bloomberg and the Wall Street Journal both created new verticals, both largely focused on data to tell sustainability and climate change stories.
For the publishers covering corporate sustainability and responsible business practices, the pandemic has hardened their editorial focus to look much more at how sustainable business practices are standing up to economic and social disruptions.
Corporates should expect much more detailed scrutiny on their responsible business or sustainability strategies and progress reports in this altered editorial context. Transparency and self-awareness in your communications will be more important then ever.
4. Policy making in the UK and Europe
Until recently it looked like policy making in the UK and EU had changed in terms of timing, but not ambition. Whilst that is still true for the EU, it is becoming less true in the UK as the Government’s actions are increasingly at odds with their positive rhetoric on a green recovery.
This inconsistency seems mostly to be a by-product of trade negotiations with the EU. Just this week Greener UK, a group of 13 UK environmental organisations, raised concerns that environmental standards in several areas are at high risk of weakening post-Brexit given the current trajectory of negotiations.
In the UK, companies should be seeking to make the distinction between rhetoric and action when it comes to Government policy. This is particularly important with key milestones on the horizon including the Brexit trade negotiations and COP26 next year as well as the effects of the UK’s Net Zero legislation – not to mention the economic fallout of the pandemic.