Is covid-19 a force for a more sustainable world?
The covid-19 pandemic has devastated economies and populations across the world, leaving many people and companies vulnerable. But there is an upside: carbon emissions are decreasing, air pollution levels are down and damaged ecosystems are recovering. With businesses returning to varying degrees of normality over the coming months, can companies keep with the trend and make their business models more sustainable?
The covid-19 pandemic has forced entire countries into lockdown and triggered fears of financial market meltdown. But while so many employees work from home and the use of cars and public transport is at an all-time low, something amazing is happening.
Statistics company Statistica has reported that lockdown measures forced by covid-19 reduced industrial activity and traffic circulation in urban areas across Latin America. As a result, in early April, air pollution levels in Bogotá, Colombia decreased by 68% compared to the same period the previous month. In Lima, Peru, it was 61%, while the National Interconnected System Financial Operation Committee (COES), an electric power non-profit organisation, reported the country’s electricity usage was down by 6%.
Some Latin American countries are seizing the moment to make the most of covid-19’s green side effects. In Chile, for example, the ministry of the environment is looking for alternatives to replace fireplaces that burn wood and coal with other more environmentally friendly heating solutions. Meanwhile, recycling in the country is unpopular – less than 1% of the country’s waste is recycled, compared to 35% in the US. Due to covid-19, Chilean recycling points have closed to prevent the spread of the virus, leaving Chile’s “trashpickers”, organised under a collective called the “Recycling Movement,” out of work. To ensure recycling continues during the pandemic, the ministry launched a campaign to collect food and donations, as well as face masks and other personal protective equipment, so those workers continue their job of recycling on Chilean streets instead of at the now-closed plants.
Inspired by the government’s lead, local and international businesses with operations in Chile have got on board and incorporated the ministry’s initiative into their corporate social responsibility programmes. “Companies like CMPC, Natura, Coca Cola, Tetra Pak, McDonald’s, CCU and Pacto Chileno de los Plásticos have already donated [to the recycling campaign],” says Katherine Barcia, legal director for Chile, Argentina and Peru at management services company ADP. “We’ve seen a lot of corporate-driven measures specifically aimed at staying green in Chile.”
However, studies conducted by the International Renewable Energy Agency (IRENA) show that efforts to make a positive social and environmental impact, for the most part, will only be temporary if companies don’t introduce long-term plans that they can monitor and measure, holding themselves accountable for the progress they make on the sustainability front. Alicia Bárcena, executive secretary of the United Nations (UN) Economic Commission for Latin America and the Caribbean, has been quoted saying developments caused by covid-19 such as lower emissions and decreased use of electricity should pave the way for “the post-covid-19 world.” Indeed, some companies are at the forefront of such developments.
Early last month, consumer goods multinational Unilever’s CEO Alan Jope reaffirmed the company’s corporate social responsibility goal to half its use of virgin plastic by 2025. The business has already launched green products such as the home technology multi-purpose cleaning brand Cif’s eco-refill kit, which allows consumers to refill and reuse their Cif spray bottles for life, reducing their use of plastic by up to 75%.
There are other ways companies are going green. Lockdown and quarantine measures have meant many workers have to stay home, reducing their number of face-to-face interactions – ushering companies to digitise and automate their processes, including cutting down their use of paper to keep working efficiently. Seeing how well employees have adapted to remote working demonstrates how being more environmentally friendly does not have to harm productivity or the bottom line. “If companies hold a clear vision of the importance of going greener then yes, they can make a difference,” says Antonio Grillo Neto, GC for Brazilian construction company Empaenge.
Building on what a business already has can be useful, too. Global cosmetics brand L’Oréal has taken the step to build on its already stellar corporate social responsibility programme. It already has its sustainability initiative Sharing beauty with all in place, which was conceived back in 2013. L’Oréal hopes to fully implement it across the business this year.
The programme aims to reduce L’Oréal’s ecological footprint by dialling down on its waste production, water and energy consumption across its entire value chain – from product design to distribution, including production processes and the sourcing of raw materials. The business set itself new goals last year ahead of the UN climate change framework convention, which was scheduled to take place in Santiago, Chile before it was moved to Madrid, Spain due to the country’s civil unrest at the time.
With the onslaught of covid-19, some companies might shy away from implementing new initiatives; L’Oréal has bucked the trend and implemented more. Last month, the company launched L’Oréal for the Future, a programme designed to help damaged natural ecosystems and help prevent climate change.
The company will invest US$108.2 million to finance marine and forest ecosystem restoration projects through the L’Oréal for the Future programme, as well as projects that encourage a circular economy – one in which the maximum value is extracted from products and materials before they are recycled. L’Oréal aims to fully roll out the programme by 2030. “We’re taking the lead to be stewards of a more sustainable economy,” says Marisol González Ortega, GC for Latin America.
Companies can also focus their sustainability commitments around people by creating social programmes aimed at helping vulnerable populations. The second part of L’Oréal for the Future is centred around helping vulnerable women disproportionately affected by the covid-19 pandemic. L’Oréal has created a fund worth US$54.1 million to support local charities in their efforts to fight poverty, help women find jobs, provide emergency assistance to refugees and disabled women, and fight against domestic violence, which has been on the rise since many countries have locked down.
Closer to home, an increasing number of companies want to improve the quality of life of their employees. However, it can be a balancing act to implement internal initiatives while also trying to make the business greener.
Remote working can be hugely positive for employees by allowing a better work-life balance and keeping them safe during the pandemic. In turn, it also has a positive effect on the environment by cutting the commute to work for many people, which helps reduce greenhouse gas emissions. Neto’s legal team has considered keeping remote working in place even after the worst of the pandemic to reduce the company’s carbon footprint – but there are issues with this.
Mental health can plummet for workers missing everyday interactions with their colleagues. “Although the company has experienced a lot of changes, it´s imperative for us to protect the mental – not just the physical – health of our colleagues as a result of the abrupt changes we’ve all experienced,” explains Neto.
Taking things to the next level
Other companies are looking to seize the moment and go the extra mile amid the covid-19 pandemic by reviewing their business models. Empaenge’s Neto says his legal team has been looking into gaining B Corp certification for the business. Certified B corporations are businesses that pledge to meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose, and are certified by non-profit organisation B Lab.
Certified B corporations can access covid-19 business resources collated by B Lab, such as government policy databases, leadership advice, employee communications strategies and managing stakeholders on B Lab’s website. They can also participate in virtual catch-ups, CEO webinars, and hear “B Corps in action” – positive stories about certified companies lending a hand to support local communities and key workers – from other companies that have this certification. Brazilian company Natura Cosméticos is one example of a B Corp; Mexican energy company Iluméxico is another. “We are stressing the importance of finding new ways to carry the business forwards, not only to a green economy but also an economy that sees human rights as a fundamental component of its activities and results,” says Neto. “We are all reviewing our business model.”
Walking the line between doing what’s best for a company’s bottom line and its employees during a time of crisis and building towards a more sustainable future is difficult. Green initiatives are often an extra expense for a company, and sustainable action tends to require collective action across a whole business – which is difficult when the whole world is in disarray. However, companies committing to achievable sustainable goals, like a B Corp certification or funding charitable causes, can help close this gap, even during trying economic times causes by the covid-19 pandemic. “Amid political problems, misconceptions about the pandemic, quarantines and lockdowns, companies are adapting to a new way of living,” concludes Neto. “But things will never be the same after this – so they need to rethink their business.”