Sustainability has been at the top of the global agenda for the last decade. Especially in Europe, consumers have become much more aware of the impact their choices have on the environment – and they buy accordingly. People seek out products that are more eco-friendly, more local, more organic, and more responsibly made. Will these encouraging signs continue in the post-COVID-19 world? Or will this be yet another moment that gets buried by economic reality?
In a recent editorial, a French philosopher wrote, “Nothing goes out of fashion faster than the future,” which sums up our ten years of involvement in sustainable business practices. As advisors on sustainability for businesses and brands, we help our clients define what this concept means to them and their company, and in the past decade, we’ve seen a lot of back-and-forth movement in business leaders’ willpower on this topic!
It’s certainly too early to predict the reactions of the global economy to the COVID-19 pandemic and the steps governments have taken to contain it. And the current rose-colored-glasses view of the post-coronavirus world calls for caution. We hear of immediate de-globalization, widespread relocation, a wholesale switch to electric vehicles, a return to sovereignty in strategic sectors – all good things where sustainability is concerned, but there’s also a good deal of naiveté involved, too. From the suspension of energy transition plans in Eastern Europe to the urgency for many companies to restore their bottom lines as quickly as possible, there is no shortage of reasons to keep our optimism in check.
However, after such a profound disruption to every aspect of the way we live, it’s hard to believe we’ll just go back to “the way things were.” So, in order to keep things in perspective and to get an idea of the changes we can expect, there are four key indicators we should all keep an eye on:
1. Where there’s a (political) will, there’s a way
Whether through tax or investment incentives, re-emerging economic plans, or increasingly demanding regulations, we know that political will is a powerful driver of change, both at the national level and within the European Green Pact. Will long-term corporate behavior live up to the first promising declarations? Will the timing of changes balance pragmatism with real transformation? Will the rise in the power of the Greens accelerate or increase how much progress we see on these issues? Time will tell.
2. Together, individuals have the power to drive change
Each one of us has had a chance to step back from our day to day and ask ourselves important questions about our values, aspirations, and the paths that we’re on. Will our answers support a sustainable future? How will they conflict with the impulse to return to “before,” with its much higher levels of purchasing power? Will employees be better able to push brands and companies from within toward more ambitious commitments?
3. The choices of investment funds can have a profound impact
When Larry Fink confirmed last January that sustainable investing was becoming the norm at BlackRock, he was met with a great deal of skepticism in many European countries. Yet the power of investment companies to drive change through their choices is enormous. (Incidentally, it has been observed that socially responsible funds have weathered the recent storm a little better than others…) How quickly and to what extent will fund managers change their investment criteria – and what will the consequences be for the companies involved? We saw the recent battle over the climate resolution at Total’s general meeting – how often will this scene be repeated?
4. Business leaders’ personal commitments matter – if they live up to them
European readers will no doubt be aware of Danone CEO Emmanuel Faber’s groundbreaking commitment to sustainability, but he is no longer alone: last year, the CEOs of roughly 200 European companies expressed their expectation that the new European Commission will be strongly committed to the announced Green New Deal. And in an op-ed published in French newspaper Le Monde last month, 90 CEOs called for a collective effort to make economic recovery an engine of the green transition. Will these statements be followed up with more specific commitments? Will they actually be put into effect, or is this an opportunistic stance that will drown in detail? Will the leaders of small- and medium-sized enterprises follow suit?
Monitoring these indicators will help us get a handle on how the COVID-19 pandemic will affect the move toward a truly sustainable economy. And in the months ahead, every business leader will have to keep a close eye on what’s happening to make sure that don’t miss out on a single opportunity to transform their business.
One thing is certain: No matter how powerful or well-intentioned, words are cheap. But if the commitments we have been hearing from every direction are kept – if these words are followed by actions – the rewards for us, our planet, and future generations will be priceless.