Neither military power nor wealth can stop the destructive global spread of COVID-19, a tiny member of the Coronavirus family. Its full human impact and economic cost will not be known for months to come. The virus is only now spreading amongst the most vulnerable populations, the millions who are cramped into refugee camps, and the hundreds of millions who live in city slums or in poverty without proper sanitation or medical support. As the pandemic is unfolding, it is revealing human vulnerabilities and showcasing the importance of good leadership and well-functioning, universal social and health care systems.
While the current focus is on responding to the pandemic and on coping with its immediate effects, the lessons we will collectively learn from this crisis are equally if not more important, as we know that the next global crisis – the climate crisis – is already well under way, building up its destructive potential around the globe. This is of particular relevance for the younger generations. They will inherit the political and economic systems that are now being reshaped in response to the COVID-19 pandemic and their future is being mortgaged with enormous debt as governments are mobilizing unprecedented stimuli packages to avoid a deep recession.
There are at least four lessons we should learn from the pandemic:
4) The pivotal role of the private sector
Commerce has long acted as a bridge-builder between nations by connecting cultures and people, not through military power, but by spreading knowledge, mutual understanding and economic benefits. The world will remain deeply interconnected also in the post-COVID-19 era, and economic interdependence will remain the most viable pathway to secure peaceful co-existence and prosperity. In a fragmenting world where policymakers seem to have forgotten the lessons of history and largely ignore common interests that are shared by all of humanity, the private sector is playing an ever more critical role.
While coping with the pandemic in a struggle to survive, many well-managed companies have put the health and safety of their workers first while cooperating and working with clients and customers across borders and along supply chains. Many companies have retooled their manufacturing capacities to supply medical supplies and have mobilized community-based efforts to cope with the pandemic. One such example is Volkswagen, which in late January already donated medical supplies to Hubei Province of China. China in turn is now providing massive supplies to Germany. Leading technology companies are collaborating to develop “contact apps” and pharmaceutical companies have initiated unprecedented cooperation in the race to develop vaccines.
Good corporate citizenship practices are much needed to complement government efforts. The idea and practice of corporate sustainability and its financial equivalent – sustainable investing – is now playing an important role in coping with the crisis, affirming once again that values and purpose are the enduring features of resilient organizations. Equally, if not more important, is the fact that corporate sustainability and responsible investing now also serve as counterweights to the dark forces of economic nationalism and protectionism.
The sustainability movement will gain further relevance in the post-COVID-19 era. For corporations and investors, the need to align strategies with a broader purpose that speaks to the needs of society will be the key to growing and building trust. The pandemic has put a spotlight on human vulnerability and the fact that human safety and the health of the natural environment go hand in hand. This may well reinforce existing consumer trends towards healthier and more sustainable lifestyles. Environmental priorities are bound to gain greater strategic relevance over time and far-sighted executives will use the current crisis to accelerate decarbonization and to resource-efficiency measures. And arguably most important of all, the pandemic has acted as an accelerator for everything digital. Innovation and new business models will enjoy a premium and will give a boost to automation, resource efficiency and decarbonization, touching all segments of the economy. Moreover, digitalization and better smart data analysis are the fuel that drives ESG investing. Early evidence is already suggesting that ESG investing is gaining greater relevance in the light of the pandemic. Moving forward, the convergence between corporate sustainability and sustainable investing offers unprecedented opportunities to renew markets from within.