As businesses prepare to crank their operations back up after months of inactivity, the clear skies, roads and shipping lanes that have defined the pandemic lockdown period could soon be over.
The emissions decline—the biggest since the Second World War—that has resulted from an economic slump will quickly be reversed if companies go back to work as if the biggest wakeup call in the recent history of human activity had never happened.
Now is an opportunity for businesses to decouple economic growth from the forces that have led to the pandemic—among them, exploitation of natural resources and climate change. Businesses may be under pressure to get back on their feet, but they do so with different expectations from stakeholders, commented Thomas Milburn, Southeast Asia director of sustainability consultancy Corporate Citizenship.
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One lesson from working with busineses during the Covid-19 pandemic is that the economy should support society and people’s livelihoods, not the other way around, said Milburn. “Businesses with a clear sense of purpose that is attuned to the needs and well-being of society are those that we will place our trust in as employees, customers and investors, in order to rebuild better.”
A second lesson is that businesses should see in Covid-19 the disruptions they are likely to face from climate change, Milburn said, pointing out that five of the 10 biggest long-term risks businesses face are climate-related, according to a report from World Economic Forum, published in January.
Covid-19 presents businesses with an opportunity to reduce inequalities in the workforce. This virus has shown how we are all interlinked.
Madhumitha Ardhanari, sustainability strategist, Forum for the Future
Business needs to get serious about climate risks as they rebuild post-Covid, and build resilience into the economic, social and environmental systems on which we all rely, Milburn said.
But how? Here are eight ways sustainability can help businesses and society in the post-Covid era.
A combination of Covid-19 movement restrictions and the trade war between China and the United States has hurt international trade, and prompted firms to source locally to minimise disruption risks. Post-Covid, if businesses continue to proximity-source their goods, they could align their supply chains with climate goals. Shipping accounts for about 3 per cent of global emissions. A 7 per cent reduction in dry cargo trade would align carbon emissions from the shipping sector with the Paris Agreement’s 2°C global warming limit by 2030, according to projections from climate risk assessment firm Trucost.
The pandemic has forced the corporate world to get used to using video conferencing technologies. If this way of working sticks, firms could dramatically rein in their travel carbon footprint by not flying to meetings and events. Before Covid, carbon emissions from aviation were projected to rise by a third by 2050. However, according to Trucost analysis, if every company that uses air travel cut its air milage by 40 per cent, it would align the entire aviation sector with a 2°C climate scenario by 2030.
Businesses adapted quickly to lockdowns by removing the technical and behavioural barriers of remote working. Work has stopped being a place people go, to just being something people do. Companies that do not recall their staff back to offices stand to gain from carbon savings from reducing commuting and increased productivity. According to Trucost data, if all professional services firms implemented a three-day work-from-home policy, it would align emissions from passenger transport with a 2°C climate scenario for the next five years (further efficiency gains and more sustainable transport use such as electric cars would be needed after 2026 to keep emissions reductions in line, Trucost calculates).
Covid-19 has exposed the importance of human resources to a business, as issues ranging from managing furloughed workers to working-from-home arrangements have swamped the HR department. Firms need to place greater emphasis on the value of the HR function to better manage their place in society, starting with care work. “Employers have the responsibility to not see caring needs as a burden but as fundamental to society,” said Madhumitha Ardhanari, a strategist at sustainability non-profit Forum for the Future. “Caring can be about regularly checking in with staff, and offering mental health support for those in need. It is also about showing appreciation for cleaning aunties, food delivery riders, hawkers and migrant workers. Covid presents businesses with an opportunity to reduce inequalities in the workforce. This virus has shown how we are all interlinked.”
Businesses with a clear sense of purpose that is attuned to the needs and well-being of society are those that we will place our trust in as employees, customers and investors, in order to rebuild better.
Thomas Milburn, Southeast Asia director, Corporate Citizenship
Remote working will reduce the amount of waste a company generates, and sorting trash will help drive the local circular economy for used materials—and save money in the process. Though it varies by sector, waste management consumes about 4 per cent of a company’s total turnover, including the value of unused resources. Even in Singapore, where the recycling rate is low, businesses that segregate and recycle their trash make savings compared to companies that don’t, said Remi Cesaro, director of consultancy Zero Waste City. Shopping malls, for instance, which produce between 500-2000 tonnes of trash a year, can save 60 of the cost of waste collection by segregating their waste.
The big-three sources of building energy consumption are lighting, IT and cooling. To reduce energy use from lighting, switch to LED right away, said Cesaro. To fix computing is mostly about user behaviour. Encourage staff to use energy-saving devices like screen-savers, and power down their machines when they’re not in use.
The big one is cooling, the single largest consumer of building energy in the tropics. Cutting cooling energy consumption, Cesaro explained, requires dilligent maintainence—an inefficiently run HVAC [heating, ventilation, and air-conditioning] system can add 20 per cent to the energy consumption total. Adding a predictive analysis tool to the system, which predicts when the efficiency of the chiller will change, can add 2-5 per cent savings, he said.
Professor Lee Poh Seng, deputy director of the Centre for Energy Research & Technology at the National University of Singapore, said that as offices won’t be full, companies need to adjust the settings of their cooling systems. Firms moving into new offices should consider less energy-intensive solutions such as chilled beams or passive displacement ventilation systems—which also minimise infection risk—he said.
Events have had to adapt and go digital. Many will remain so, as webinars get better and replace physical conferences. But in business, nothing beats in-person meetings. When events do return, organisers could consider two ways to run more sustainable gatherings—both of which require cultural change.
First, think harder about the biggest environmental cost of events: food. A study by Singapore-based consultancy Earthys found that event organisers, particularly in Asia, tend to overcater to avoid losing face. One solution would be to peg the catering budget to the amount of food waste generated at the previous event, Earthys suggests. This would encourage organisers to monitor attendee turnout more closely, and adjust catering quantity accordingly.
Second, stop giving out goody bags. Most tend to end up in the bins outside the event venue, said Earthys director, Dr Nanthinee Jevanandam. To avoid the reputational hit of being seen as stingy, event organisers should first ask attendees if they actually want to receive any gifts. Most will decline, making it easier to withdraw good bags altogether at the next event.
“For the first time, there is strong evidence that environmental, social and governance (ESG) issues really matter for business,” said Rajesh Chhabra, managing director of sustainability consultancy, CSRWorks International. He pointed to data showing that socially responsible investments have seen better-than-average returns since the start of the pandemic. However, companies that report emissions and other ESG-rated data are still in the minority.
Now is the time for companies, particularly more vulnerable small-to-medium sized busineses, to learn from others with serious ESG credentials that have shown greater resilience during the crisis. “Some companies will take the short-sighted view to focus purely on financial matters coming out of Covid. But whenever the recovery happens, the companies that stayed the course [with ESG] will see a big upside,” he said.
Measuring ESG performance will guide companies towards decarbonisation, cutting emissions and costs in the process. As well as investing in energy efficiency and switching to a renewable power source, introducing an internal carbon pricing system could limit the risks of the transition into a low-carbon company.
For more stories on how the Covid-19 pandemic has affected sustainable development, go here.