COVID-19 is a global pandemic that has had major societal impacts even after only four short months. The essence of this strain, being highly infectious and deadly, makes this disease much more dangerous than what we are used to. Currently, there is a world-wide quarantine as a way to mitigate the spread of the virus and to flatten the curve. However, this has resulted in a stagnation in production and economic growth. The consensus seems to be that the global economy will be in a recession after the pandemic passes. Yet, there is a silver lining to this pandemic. As manufacturing has stopped, carbon emission levels have been at an all-time low. Social media is filled with reports that animals are coming back to their habitats as humans stay indoors. While the social impacts of the pandemic cannot be ignored, it is also important to look beyond the pandemic to consider “what’s next?”. In this essay, I will argue that the COVID-19 pandemic provides an opportunity for a more sustainable future and status quo.
The COVID-19 pandemic provides a unique opportunity for corporations to look beyond the interest of shareholders. After a month of quarantine, many things remain unclear. Important questions like “when will the quarantine end” or “when will a vaccine be available” are still up in the air. Given the current climate, with the pandemic and a global quarantine, many business plans and growth goals are now unusable. These extreme uncertainties make any attempts at valuation a loss cause. Realistically, shareholders should not expect to profit from this year given the fact that the global manufacturing sector is disrupted, consumers are choosing to limit themselves only to essential consumption, and the aforementioned overall uncertainty of a pandemic. As this is the case, corporations are in an unusual position where its goals can be oriented towards serving the society as a whole instead of its small group of investors.
For instance, corporations can and should focus on taking care of its employees. This case can be separated into two groups, those providing essential services and those that do not. In the case of corporations that do not provide essential services, the stay-at-home order would stop employees from coming into work. For white collar workers, advancements in technology allows for working at home which may prove to be a slight inconvenience at most. However, the real problem concerns blue collar workers where working from home is not an option. These people must still be taken care of, especially when it is more likely that these workers are more vulnerable (than white collar workers) to financial insecurity. In the current situation, these people are cut off from their income sources with nowhere else to turn to as other businesses are also forced to shut down their production. This emphasizes the need for financial support for this extremely vulnerable group. On the other hand, corporations employing essential workers are in need of a different form of aid. The difference comes in the fact that these corporations will have to take care of their employees at work given the dangers of the pandemic. Examples of these essential workers are those in the health care sector, public safety staff, and those responsible for producing and distributing essential goods. These workers are risking their own safety in order to provide for the society as a whole. As these workers are not in quarantine, they are more prone to catching the coronavirus. Measures relating to getting tested and getting treated is not only essential but also an absolute must for all employers to consider.
The opportunity for sustainability comes in the form of the method these corporations consider in providing this welfare aid. This pandemic is an absolute worst-case scenario for a quasi “sick leave” which allows corporations to shape its welfare policy around. This new policy will have an added benefit of being able to withstand anything else given that it has been “tested” on what is considered to be the worst possible case.
Alternatively, the pandemic is putting current corporate welfare policies to the test. For example, Amazon has recently been criticised for its sick leave policy. Currently, Amazon employees are considered essential workers as the majority are staying at home and choosing to order goods to their households instead. Demand for Amazon’s services at the start of 2020 is comparable to that of peak holiday season. To match this spike in demand, Amazon hired 100,000 more workers. When the coronavirus was declared a pandemic, Amazon introduced new policies which states that workers can take unlimited unpaid time off and that those diagnosed with the coronavirus will receive up to two weeks of paid leave. Both policies are a massive increase from Amazon’s pre-pandemic policies and on paper, they seem generous. However, the problem arises from the availability of testing which is a requirement to receive the paid leave benefits. To make matters worse, workers noted that the method to apply for these benefits are unclear to them and that attempts at reaching out to find out were in vain. It can be argued that the scarcity for testing in the US is not Amazon’s fault, however, as a company owned by the wealthiest man in the world, it is easy to imagine that more can be done to ease the pain of its employees.
Corporations now have a chance to demonstrate that they can serve the wider interest of the society. Brand image is important now more than ever; this has been acknowledged by these companies for decades now considering the massive amount of resources they put into advertising. Small gestures in these trying times can prove to support their sales in the long run. Major tech companies like Apple and Facebook have recently donated almost 10 million N95 respirators to healthcare workers. As an argument for future possible profits, corporations can consider these societal programs as an investment for goodwill which is comparable to their spending on advertisement. It is possible that these programs can be extended past the quarantine period leading to a more socially beneficial and sustainable corporation in the long run.
Another major economic agent to consider is the government. One thing that seems certain is that the global economy will come out of the pandemic in a recession. This is clear from the current world-wide quarantine followed by high unemployment rates everywhere. Public investments must be directed to where it is needed most in the short run and long run.
In the short run, governments will need to target their policies towards supporting small businesses which are especially vulnerable to the pandemic compared to larger corporate counterparts. In Thailand, SME’s make up 43 percent of the total GDP while being responsible for approximately 80 percent of employment in 2019. Depreciations in this sector will be a massive blow to the Thai economy, but more importantly to its citizens who have to bear the costs without their revenue streams. The Bank of Thailand has announced measures to ease the burden on these households and businesses. It is hoped that these measures will result in a more sustainable status quo as the power difference between corporations and smaller businesses shrink with the support of these institutions.
In the long run, post-pandemic, governments will have to focus on supporting the economy; most notably, this would be high unemployment rates. Keynesian theory argues that government spending is a viable tool for this issue. However, what makes these projects sustainable is up to what the investment is put towards. It is best if governments from all around the world consider investing in more sustainable projects. A common recommendation is to invest in job-intensive construction projects. Additionally, a possible sector to focus on could be energy. Governments can invest in green technology which would pave the way for energy efficient cities. The attention right now is in electric cars which is currently facing a bottleneck in terms of the infrastructure needed to match the convenience of petrol engines and petrol stations. While it is not a fully sustainable option compared to completely abandoning automotive, it is a step in the right direction towards sustainability. Furthermore, governments can invest in research projects which are aiming for sustainability. This includes sustainable fisheries, regenerative agriculture and reforestation. The pandemic also provides other points to consider. Inequality is more prevalent now more than ever. There is a clear distinction between those who can get through the pandemic and those who cannot. Addressing this issue is another way to achieve a more sustainable future.
It is also arguable that COVID-19 has done more harm to sustainability efforts than good. This is especially the case for vulnerable communities who benefit the most from sustainable projects. In four months, the coronavirus has reversed the efforts made towards many of the points on the UN’s Sustainable Development Goals (SDG). For example, the highly infectious nature of COVID-19 is in direct competition with goal 3 for ‘good health’. The quarantine also poses challenges to goal 4 for ‘good education’ as these vulnerable communities do not have the ability to provide online education unlike more developed nations. In the long run, the economic impact of the pandemic may stagnate efforts towards no poverty (goal 1), providing decent work (goal 8), and reducing inequality (goal 10).
While all of the arguments above may seem hopeful, they all rely on a massive ‘IF’. We will come out of the pandemic more sustainable if governments and corporations chooses to be more sustainable. A major concern is that we will come out of the pandemic none the wiser.
The majority of the global manufacturing sector are currently idle as they have no workers. It is possible that after the pandemic has passed, this sector may instead double down on production. In order to make up for lost possible revenue or growth, these companies may choose to maximise their own gains while ignoring working conditions or worker’s welfare. Additionally, this may also result in increased strain on the environment as the manufacturing process is focused on producing more in place of producing sustainably. Carbon emissions may be at an all time low now but that can change very quickly when things return to normalcy. The same is true for governments and their policies. How the public institutions respond to the pandemic will determine the direction the economy will proceed in terms of sustainability. It is possible that the government may choose to invest in low carbon investments which will help assist in a more sustainable future. Unfortunately, the opposite is also true. In an attempt to boost the economy, the government may instead choose to support heavy industry which would lead to carbon emissions rising once again, possibly exceeding the levels before the pandemic.
In sum, I stand by my point that the COVID-19 pandemic provides an opportunity for a more sustainable future. Furthermore, I remain hopeful that the two major institutions discussed, corporations and governments, will make the best of this awful situation such that it will benefit the society. Even so, I do recognise that this may not be the fastest way to recover from a recession. Additionally, these positive effects may only appear in the long run when the pandemic seems irrelevant. However, I believe that the initial pain will be worth the sustainable future we can achieve. If we do not take advantage of this opportunity now, it is unknowable when the next one will come.
References
Badré, B. (2020, April 22). Don’t waste the pandemic response. Retrieved from The Asset: https://esg.theasset.com/ESG/40238/dont-waste-the-pandemic-response
Florizone, R. (2020). Three Ways the Coronavirus is Shaping Sustainable Development. Retrieved from International Institute of Sustainable Development: https://www.iisd.org/library/coronavirus-shaping-sustainable-development
Leesa-Nguansuk, S. (2019, May 8). Thai SME digital readiness third in region. Retrieved from Bangkok Post: https://www.bangkokpost.com/tech/1673732/thai-sme-digital-readiness-third-in-region
Meyer, J. E. (2020, March 25). Coronavirus could lead to a sustainable society better equipped to tackle future problems. Retrieved from Euro News: https://www.euronews.com/2020/03/25/coronavirus-leads-to-a-sustainable-society-better-equipped-to-tackle-future-problems-view
Moss, K. (2020, April 9). The Coronavirus Pandemic Could Give Business Leaders a Broader Mandate for Sustainability. Retrieved from World Resource Institute: https://www.wri.org/blog/2020/04/coronavirus-pandemic-could-give-business-leaders-broader-mandate-sustainability
Solberg, E., & Akufo-Addo, N. (2020, April 23). Why we cannot lose sight of the Sustainable Development Goals during coronavirus. Retrieved from World Economic Forum: https://www.weforum.org/agenda/2020/04/coronavirus-pandemic-effect-sdg-un-progress/
Yu, D. (2020, April 20). Covid-19 crisis could turn into the ESG era. Retrieved from The Asset: https://esg.theasset.com/ESG/40193/financial-magazine-for-asias-decision-makers
Thank you for your article! I very much enjoyed reading it. I agree that in the midst of this pandemic, COVID-19 seems to open up several opportunities that might lead to development in sustainability. However, based on your social contribution from corporates and aid from the government, I do not think that would be the case.
Like I have written in my article, I believe that COVID-19 would somewhat force the government to invest in more sustainable practices and possibly low carbon emission in the future, but at the same time, I believe that the public budget constraint would prevent the government from doing so and actually will rely more on big corporation due to their long cash flow stream.
In order to recover from the economic downturns, the government would attempt its best to stimulate the economy. However, with only the help of small businesses, the economy may not be able to restart the economy properly. Hence, I believe that the government would impose policies that would favor the large corporation first in order for the nation’s core to become stable again and then help small businesses. But, again, with larger cash flow and time in the market, the large corporations will have the advantage and the claimed economic sustainability will not happen. I believe firmly that firms will help the society but for the purpose of generating more demands but not for the pure philanthropic purpose.
This article is interesting. I would like to say that I agree that government should impose policies that would help small businesses first. To achieve sustainability, it not just a problem of environment but it also involves how the corporations treat their workers. Since most of the workers are working with the small business, it is better to help those people before big corporations. However, if government want to stimulate the overview of country’s economy, it will need the factory to produce as double as they used to, which can leads to a higher carbon footprints in our environment.
Immediately after the pandemic, I believe the sustainable would be introduce more to all sectors since both big corporations and people consider the harm of environmental problems. For example, there is a campaign to bring self-bags to avoid using plastic bags in 7-11, BigC and etc. Therefore, I would say that I was convinced by your article that COVID-19 would pave the way for a sustainable development but it will in effect in the long run.
I agree with the idea of the COVID-19 pandemic opens up many opportunities for sustainable development. However, I concern about the way that this pandemic shapes us on a daily basis.
As the stay-at-home order, we use the delivery service more than ever and when the pandemic is over, I predicted that this lifestyle will continue to go along with us. When everything is back to normal (traffic heavy as usual), the normal amount of car used as a commuting method and with the additional motorcycles used for delivering will increase the carbon emission by a lot. Still, as you said, the government and corporation need to take the role in order to recover from this tragic downturn.
I think you raises a very interesting topic. I am agree with you that covid-19 pandemic provides several opportunities that lead to sustainable development because it makes people start to concern more on the society than their own interest. However, I think that both the government and corporation need to take those opportunities seriously. If not, our development will be no different than before the covid-19 pandemic which is unsustainable.
In my opinion, the government should focus on supporting small businesses because they responsible for 80% of employment as you mention above. I believe that small businesses will be shut down in huge amount not only during covid-19 pandemic but also after pandemic. This will lead to only big company stay in the market place. Moreover, it will give them more power to influence market price and at the same time produce things that is unsustainable to meet the demand of customer in the market. Therefore, the government should balance the support between small business and large business wisely.
I hope that this covid-19 pandemic can help to change the way people behave and lead to a better sustainable development. In addition, one of the most important things is the cooperation between government and corporation.
During this period of COVID-19 outbreak, it is a great time for corporations to offer an enhancement of sustainability. I agree that corporations should find an effective way to support their employees especially those in blue collar as they may have some financial problems which negatively affect their livings.
Moreover, those people who work with small and medium businesses should receive assistances from government since majority of individuals are working in those businesses as mentioned in your article. The government could help by subsidising those SME for paying worker salary so that there will be less unemployed people. Also, as we could see from COVID-19 pandemic, natural is returning back to the way they used to be like you mention In this essay. It is reported in the news that Indian people were able to see the Himalayas for the fist time in decades because the COVID-19 lockdown reduce majority of pollution as most factories were closed and most people do not have to travel around. This situation implies how polluted our world is, and most people never be conscious of it, so I could not agree more that it is good opportunity for the government to support greener and more eco-friendly businesses and should start now because if not now, when?
I agree that COVId 19 may be able to lead to sustainability, if the government do what the article says. I think that COVID 19 helps the environment right now because of the quarantine. When people stay at home they consume less and also the factories shut down, so they produce less pollutions. Therefore, this will make the environment better. In reality, people care only money and economy. During the quarantine, the factories shut down and people go bankrupt, so this will make the economy worse. I think that environment is important but the economic situation is more concernable right now. This situation will raise the inequality problem and this can cause a long run problem as well. I hope that government and corporation care about people well-being more that profit during COVID 19. They should think that if they be able to help people, demand and profit will come back later. In my opinion, They should help poor people first in order to bring back demand and revenue to their company because poor people or middle class people are the major class that consume their goods and services.