Is your business ready for the post-pandemic future?
Since the beginning of the COVID-19 pandemic, there’s been one very obvious question ahead of us: Where are we going? We’re clearly in the midst of tumultuous, “unprecedented times” (as every marketing email likes to remind me). The U.S. Federal Reserve has stepped in with a broad array of actions to limit the economic damage from the pandemic. Plans include up to $2.3 trillion in lending, and keeping interest rates near zero. But that approach amounts to the equivalent of putting a band-aid on a gaping wound. It assumes that we’re going to go back to business as usual. I don’t think we are. I think we’re entering the era of sustainability and sustainability communications.
A Systemic Crisis
The fact is that the pandemic has exposed our vulnerabilities. “It is more than a health emergency, it is a systemic crisis that is already affecting economies and societies in unprecedented ways,” says the United Nations Development Programme (UNDC). Their report, “Covid-19 and Human Development: Assessing the Crisis, Envisioning the Recovery,” was issued earlier this year. We’re now acutely aware of the business models that are resilient and prepared to weather economic shocks.
Even prior to the pandemic, sustainability and business resilience were becoming a key factor in capital allocation. In a letter to CEOs earlier this year, Larry Fink of BlackRock Capital said that climate risk is investment risk. “I believe we are on the edge of a fundamental reshaping of finance,” he explained. If investors can’t accurately assess an investment’s long-term risk and resilience, how can they effectively invest? “In the near future – and sooner than most anticipate – there will be a significant reallocation of capital,” Fink says.
Preparing for the Era of Sustainability
But it’s not just climate change; it’s about overall sustainability. “The pandemic was superimposed on unresolved tensions between people and technology, between people and planet, between the haves and the have-nots,” says the UNDC report. How will we bounce back from this by using the systems that got us here in the first place? We won’t.
“The 2020s will be the most disruptive decade in history,” say James Arbib and Tony Seba in their report, “Rethinking Humanity,” issued in June 2020. “COVID-19 has simply pulled the curtain on the fragility of current models of production and governance. It is just one of a series of predictable shocks that threaten to devastate our civilization if, collectively, we do not make the right choices.”
We need to look into new ways of doing business. The New Deal invested in public works that pulled us out of the Great Depression. A modern New Deal would need to focus on resilience in terms of energy and production: a network and node model. This will be more scalable and less prone to shocks. “The advantages of scale will disappear…,” say Arbib and Seba. Scale as a competitive advantage will be replaced by demand-side network effects.”
The Importance of Sustainability Communications
So how, then, can we prepare? With the choices we make.
Going forward, I’m focusing on sustainability communications and strategy. Why? I know that organizations must strategically formulate their value in this era of transformational change. Companies will be under increased pressure to build sustainable, resilient systems, and communicate those plans to stakeholders. Those who effectively engage in strategy and reporting will be better positioned for long-term success. It’s my goal to be there for this next phase of business.