Leveraging COVID-19 as catalyst for progress towards a more sustainable future
Across the world, business sustainability and public policies have been tested by the COVID-19 pandemic in ways that are unimaginable. Reliance on digital platforms has increased especially with the mass transition to working from home. Supply chains have been stretched to the limit due to increased demand for certain products. At the same time, governments have been forced to make decisions resulting in entire industries being effectively shut down.
Now is the time for both business and government to rethink strategies for sustainability beyond the pandemic. Companies have to capitalise on the behavioural shifts seen to benefit both consumers and investors. The impacts of Covid-19 can be a catalyst to tackle climate change with the right approach. Businesses and governments can work together to build a more inclusive society.
These were some of the burning issues discussed at the recently held global conference tagged FT Digital Dialogue, with the theme: Building a More Sustainable Future: The Pandemic as a Catalyst for Progress, organised in partnership with JTI and the International Organisation of Employers (IOE), where speakers shared perspectives on how business, government and civil society can work together to use the pandemic as a catalyst for progress towards a more sustainable future.
Impact on businesses
Speaking at the Financial Times Digital Dialogue, Suzanne Wise, Senior Vice President, Corporate Affairs and Communications, Japan Tobacco International (JTI), said businesses have been globally impacted by the pandemic and it has massively impacted companies; most of which have lost some or all their economic activities.
Wise disclosed that as a tobacco company, JTI operates in one of those industries that’s largely been able to continue operations during the crisis, adding that JTI have also not been without challenges, as some parts of the business, for example, worldwide duty free has disappeared overnight as a result of COVID-19.
Navigating challenges of COVID-19
Suzanne Wise noted that in addressing the challenges resulting from the pandemic, JTI has always had a long term approach that is helping it sail through the times.
“We operate in one of those industries that have largely been able to continue operations during the crisis. We have, at the heart of our company, four stakeholders’ models. And we really try to make sure that we focus and deliver for our four key stakeholder groups, which are our employees, consumers, shareholders and the wider society. This model embedded in our business has stood us in good stead.
“Despite the global crisis, it has enabled us to stay true to our principles and continue to strive to do the right thing. And from an industry perspective, there is obviously a real conflict between economic recovery and sustainability goals and like all companies and projects; to improve our impact on the environment, we have to go on a long list of other investment projects and we have to look at return on investment,” she explained.
She hinted that it was time to look at long term projects that could help sustain companies and the environment, adding that JTI’s decisions are being informed by its consumers and employees who are increasingly driven by sustainability in its agenda.
She reiterated that now is the time to build for the future and to invest in long term projects.
Disclosing some of the projects JTI has, she said, “We have a strong commitment to reach net zero carbon emissions from our own operations and we are actually already well on track to reduce greenhouse gas and gas emissions by 35 percent between 2015 and we are looking to accelerate, and that means net zero commitment.
“We have many projects in terms of our factories that will impact the environment. Perhaps one of our best examples is our factory in the Philippines, where we’ve installed the largest driven power roofs and self-consumption solar systems which is the largest of those systems in Asia.
“I had the privilege of actually visiting that factory before COVID and all the travel restrictions, and it was all inspiring in terms of its scale and ambition. The factory provides excess energy which we give back to the local community.”
Green recovery measures
Speaking earlier at the session, Robert Youngman, Team Leader for Green Finance and Investment, Environment Directorate, Organisation for Economic Co-operation and Development (OECD) said governments in some countries are already incorporating green recovery measures amid the COVID-19 pandemic.
According to Youngman, they have looked at policies across member countries and partner countries such as Brazil, China, India, Indonesia, and South Africa to see the extent to which they’re incorporating green recovery measures.
He disclosed that what they have seen is that so far the measures are concentrated in the energy and transportation sectors; for example, some countries are scaling up efforts and funding to reallocate current space to more sustainable models, and this has been seen in different cities.
He observed that there is a concern about whether to go back to the old model, and some countries are conditioning for recovery support in key sectors such as aviation in Air France, adding that their rescue package includes provisions that the airline reduce its carbon footprint.
He said Canada for instance offers bridge financing to large employers and that is conditioned on businesses publishing annual climate disclosures, to help companies and investors in those companies understand exposure to physical and transition climate risks.
“So we’re seeing different ways to support a green recovery. For example, Germany doubled their incentive for electric vehicles to 6000. What we estimate so far is that governments have committed some amount of money to this. This is sort of an unpublished preliminary estimate that we will be revising probably upwards.
“At the same time, 24 national governments have announced measures that are likely to have a direct or indirect negative impact on environmental outcomes. So even though that’s not the focus of today’s discussion, it’s definitely worth noting that we see some rollbacks in existing regulation.
“The inverse of this is unconditional bailouts of emissions intensive industries of companies such as airlines, fossil fuel, extractive industry, but also we see increased subsidies to possibly one sense of infrastructure including road transport.
“For positive measures, there’s a lot of ways that governments are supporting it. You can see grants, loans and tax relief for green transport, financial support to household renewable energy, to energy efficiency and new funding to create jobs through ecosystem restoration,” Youngman said.
Helping businesses survive
Roberto Suárez Santos, Secretary-General, International Organisation of Employers (IOE) who was also a speaker at the digital dialogue said IOE members are all over the world, and 60 percent of the population right now are in the informal sector and there is a balance to be made in terms of risk in companies.
According to Santos, “At the end of the day, we want to have a sustainable model, many of the measures, some of which include incentives and tax cuts etc. can help in terms of middle and long term perspective. These measures can help businesses face many of the obstacles that they see in terms of excessive regulations.
“Sometimes overlapping between different administrative burdens, all those elements have not taken in with ambitions that they should before. From our perspective, we should look at how we can help these businesses to develop, because at the end of the day these businesses are the ones creating values, they are the ones bringing the innovation, they are the ones also helping to have a sustainable future.
“What you need rather than a subsidy is a permanent sustainable fund. And that is, of essence I mean at the end of the day, if you want to have investment in the green economy, you need to bring the links which are permanent.”
JTI strides in job creation, amid COVID-19
Suzanne Wise said despite the impact of COVID on JTI’s operations, the company is bringing up new innovations in a bid to create jobs and increase economic activities.
Wise said JTI is a very large company with about 45,000 employees spread across 190 countries with various farmers in Africa who will lose their whole livelihoods because they don’t have enough water resources or enough wood.
She said JTI has factories in some countries where it observed they will run out of water resources and won’t be able to operate, adding that these are real risks that have been identified and those are part of the reasons they absolutely support their tobacco farmers as much as possible.
“This is one of the reasons why we have a target in the next 10 years to make sure that all our growers are using wood for tobacco curing from renewable sustainable forests as an example.
“So for us as an organization, it’s not about jobs today, but it’s absolutely about jobs in the future. It is the obvious choice we have to tackle these issues, as we can’t wait to start tackling them in 10 years’ time,” Wise said.