Business lessons from phase 1 of the COVID-19 pandemic
We are only in phase one of a pandemic that has changed the rhythm of daily life like no other recent event. Here are five lessons to guide us through these turbulent times and the uncertainties which lie ahead.
This article originally was published in the BSR Insight
How quickly life can change.
We are only in phase one of a pandemic that has changed the rhythm of daily life like no other recent event. As we take time to think first of the health of our families, friends and communities, we are already learning lessons that will help us to navigate the urgent trials we face today as well as the fundamentally important challenges awaiting us once the worst of the pandemic passes.
Here are five lessons to guide us through these turbulent times and the uncertainties which lie ahead.
1. The virus makes clearer than ever that the social contract in many places is not fit for purpose and needs to be reformed.
The social contract, meaning the roles and responsibilities of government and business and the needs of citizens and employees, is being tested in an extreme way right now, but it was already clear that it was not fit for purpose before the pandemic struck. In the wake of the pandemic, the lack of access to health care in the United States has come into even sharper relief, this time in a potentially devastating way.
We have also seen examples of the social contract being adapted, as with Denmark’s move — through tripartite discussion between government, business and trade unions — to extend benefits to help Danes get through this difficult time. It is also interesting to see how different societies accept data sharing and transparency, which trade some privacy for increased protection.
Businesses certainly should step up to help their staff sustain themselves in the context of much economic activity apparently being stopped. And while we are seeing in real time how well the social safety net functions, there are also long-term questions that business would do well to address more forcefully after this crisis is behind us. BSR has launched an effort calling for a modernized social contract for the 21st century, with more attention to the changing nature of work, access to education and skill development, and the financial stability of our pension systems, amongst other issues. The COVID-19 pandemic reveals this to be deeply relevant for business and society and can serve to catalyze more business action to ensure our social contracts are fit for purpose. The business responses to the crisis have in many cases been excellent: this leadership also can be applied in non-crisis situations.
2. Resilience is not just a catchphrase; it’s a necessity, and it’s having its moment.
Every single Board of Directors should learn from this global challenge and invest more time and thought in exploring where its business faces other risks. There is little doubt, of course, that climate change could deliver a blow to many companies that is as profound as COVID-19, but with far more lasting impacts. We also have seen unexpected political shifts over the past few years, and businesses that have assumed broad support for a globalized economy have seen their plans upended.
Resilience in the face of fast-changing attitudes and actions on the part of a company’s workforce also present questions of fundamental importance. And we also know that political change can come overnight and test our models. In many ways, the rise of ESG investing is asking one simple question: is your business resilient in the face of massive change? We are experiencing in real time how hard it can be when the answer is no.
3. We must not turn our backs on our interdependent globalized world.
It should go without saying that we are all connected and interdependent; the virus proves just how true that is. But in an era when powerful political leaders call for walls and barriers and play to publics who can be swayed in that direction, this difficult episode teaches us the importance of collaborative solutions.
Credit should be given to French President Emmanuel Macron for convening a virtual G7 Summit and to the tireless workers at the World Health Organization for providing valid and valuable information, enabling testing and supporting health systems that need it most. In short, we need each other, and crises often remind us of that. This one certainly should be doing exactly that. It is folly to suffer the negative consequences of our connectedness without maximizing the benefits. Business has a strong interest in advocating for open societies, effective public governance and the rules-based international system that has come under attack in recent years.
In an era when political leaders call for walls and barriers and play to publics who can be swayed in that direction, this difficult episode teaches us the importance of collaborative solutions.
4. Futures thinking may be the most essential tool we have, so let’s use it.
One of the best ways to build a resilient strategy is to employ futures thinking. BSR launched its Sustainable Futures Lab in 2017, and we have worked with many companies and other partners to build scenarios to help them to map and understand possible pathways to create more desirable future outcomes. This is no academic exercise, as we now see.
Indeed, one in a set of climate scenarios we began developing late last year began with an animal-borne virus emerging from China to undermine economic and human health globally. The steps called for in the Task Force for Climate-Related Financial Disclosures (TCFD) embrace scenarios as a core of TCFD disclosures. The concept underlying the TCFD should be extended well beyond climate, to ensure that companies can prepare for the diverse array of futures that may well emerge.
5. Action on climate and the SDGs cannot be put off.
The world’s attention is quite rightly focused on the urgent need to save lives and avert immediate economic distress. But we are here for the long term also. We need both to address this shock in the first year of the decisive decade and remain 100 percent committed to building the world we are committed to building in 2030. Even as every company, large and small, is understandably focused on the here and now, this is a time when business leaders and companies should speak out to reinforce the need to make significant, tangible progress towards the SDGs. And even if the virus leaves a recession in its wake, it is essential that business remain focused on achieving the SDGs. The need for progress on climate and other environmental challenges don’t vanish during a recession. The need to invest in communities and people whose economic circumstances are diminished only grows more important. And the march of technology needs to be aligned with human rights and ethics regardless of which direction global stock markets head.
We have spoken about the "new climate for business" over the past year as we entered this "decisive decade." As we work through this rocky start to the new decade, it is essential that we remember the central importance of staying committed to our long-term goals, while adjusting to an altered reality that has much to teach us when we inevitably emerge from this crisis.