How Covid-19 could influence sustainable business Ethics and Impact: How Covid-19 could influence sustainable business
We are still in the initial phases of the Covid-19 pandemic and there are no clear answers. But now more than ever long-sightedness and a commitment to balance the competing needs of different stakeholders, including those of wider communities, will be critical in how well we emerge the other side – individually, as organisations, and collectively as a society.
In the first of our CONNECTED series we want to explore what this means for corporations. How are businesses’ Covid-19 responses mirroring (or not) their values and sustainability strategies? What patterns are emerging from the initial responses we are seeing? What does this tell us about the businesses and brands that are likely to come out of this on top?
What's at stake for business?
Economies, businesses and individuals the world over are adapting to a new normal. In this time of crisis many businesses are being caught in the crosshairs of a fast moving situation. For large businesses inevitable tensions are emerging between ethical, sustainability and financial priorities.
It will be impossible to keep everyone happy, but how well individual companies manage these tensions – and how much they hold firm to the values and commitments they’ve so publicly espoused, in particular when it comes to people (employees, supply chain workers, customers and communities) – will have big implications for their brands potentially for years to come.
Right now consumers and the wider public, with a pause on many of the things that usually absorb their attention and with so much at stake, are looking very closely at the decisions and behaviours of political leaders, financial institutions and businesses alike. This, just as we see a huge spike in the volume and consumption of news and social media.
Against a backdrop of low public trust, a surge in mainstream activism – particularly from a well-informed youth movement – and the now ubiquitous sense of anxiety that’s permeating across the globe, we can expect reactions to behaviours deemed as unethical or unfair to be extremely unforgiving.
But there are also opportunities to help mitigate the immediate impacts of Covid-19 on communities protecting the resilience of value chains and positioning individual brands strongly for when this is all over. We see more than ever that employees and consumers reward businesses that act for the good of society.
The obvious challenge is that there is of course much at stake from a market perspective, and the need to balance all of the above off against the necessity to protect profits and keep investors on-side.
With this in mind, and to inform our CONNECTED discussions, we wanted to highlight some of the responses we are seeing emerge across the business community – many of which our team here at Salterbaxter have been tracking in the last couple of weeks.
Being ethical and authentic in challenging times
The first and most obvious thing to say is that most large businesses will be taking rapid and almost certainly tough actions, many of which will inevitably run counter to their social sustainability and responsible business objectives. These actions need to be implemented in ways that adhere to established ethical norms and be backed up with honest and authentic communications. This may seem to be a reputational 101 but we shouldn’t underestimate the stress being placed on C-suite decision makers and communicators.
Here are a couple of the less good examples we have seen emerging – without naming names!
- Not following acceptable practices when it comes to redundancy, sick pay, benefits etc... (even if we are not in normal times)
- Keeping non-essential stores open for as long as possible under the guise of them being 'essential' risking transmission of the virus to staff and customers
- Claiming to be closing stores for the safety of communities (rather than because it’s being regulated), while assuring consumers that even though the world is a scary place at the moment, you are here for them and they should keep buying (see this article for examples)
- Predatory inflation of prices for essential goods such as over the counter medicines
More than ever sustainability leaders need to stay across and lean into decision making and communications to ensure their businesses are aware of the potential liabilities and that the corporate narrative remains aligned to the fast moving internal and external context.
Finding ways to protect workers, families and communities
As well as ensuring that you take tough actions in the right way, there is also a crucial front line role for business in mitigating the immediate impacts of the current crisis on people and communities.
The most direct way to do this is of course to protect the health and financial security of your own employees. In recent years many large businesses have put wellbeing and fair treatment of the workforce at the top of their responsible business priorities and communications. In the last few days and weeks we’ve seen some stand out examples of businesses who have committed to protecting jobs and wages during the crisis – particularly for low paid, low security or sick workers (e.g. Tesco, Sky, GAP, B&Q, Starbucks and Microsoft).
Beyond this, perhaps the most striking aspect of the response to date has been the huge surge in crisis response initiatives. Across multiple industries companies are mobilising assets, capabilities and products to help the effort to combat the effects of Covid-19. And in many cases these do not appear to be gestures.
Here’s a stream of examples... apparel (scrubs and masks for medical first responders, e.g. Zara); automotive (ventilators, e.g. Fiat, Nissan, GM, Ford); alcoholic beverages and luxury goods (hand sanitizer, e.g. Brewdog, The Absolut Company, Bacardi, LVMH); supermarkets (additional local deliveries for the isolated, multiple examples); hotel and events (space for hospital capacity, e.g. Premier Inn) retail banks (mortgage payment holidays, e.g. RBS); coffee chains (supporting hospital staff with free coffee and discounted food, e.g. Pret); media and consumer brands (leveraging marketing and communications channels to spread health advice, e.g. Coke Times Square billboard, ITV’s mental health campaign); restaurants (leasing staff to industries that require extra workers, e.g. McDonald’s Germany staff leased to Aldi stores)
Although it’s early days the creative thinking, speed and decisiveness that these and many more businesses have displayed in redeploying their assets and resources has been impressive.
But perhaps just as importantly others are increasing philanthropic spend behind the Covid-19 effort (e.g. Kraft-Heinz, KFC, Netflix) or channelling additional funds into existing community programmes that provide relief to vulnerable groups and communities who are being impacted more than ever (e.g. Aldi, M&S and CCEP’s work to donate food through Neighbourly in the UK).
As the forces of polarisation stall and a sense of unity and common purpose dominates there are opportunities for businesses to play a really important role and embed themselves in the movement.
But authenticity is still key. As the ex-CEO of Unilever and sustainable business pioneer Paul Polman said in a recent blog on the topic “false virtuousness will be easy to spot”.
McDonalds recent Brazilian campaign to encourage safety for all during the coronavirus pandemic saw them separating the iconic golden arches as a statement of solidarity. This quickly drew criticism, with some questioning how the brand has been treating its own workforce or painting the rebrand as an opportunistic move.
The lesson here? Avoid stunts, or being creative just for the sake of it. It underestimates the ability of the public to spot this type of move. What is required is real and purposeful action and if it comes from the right place it will be both rewarding and rewarded.
Ensuring continued commitment to climate and environmental imperatives
The insight and foresight company Trajectory recently published an analysis of the forces and trends that are likely to accelerate or slow in the months ahead. Their forecast predicts that amongst consumers environmental concerns – what Trajectory see as “more distant-seeming issues or threats” – will diminish as the crisis on the doorstep gets our attention.
This remains to be seen but to date we have seen very little commentary from large businesses on their own environmental priorities during the pandemic and what potential impacts it might have on them. Given the recent surge in coverage and concern across the globe on the climate crisis we expect to see more commentary on this in the coming weeks and certainly the long term view is that the current global health crisis may accelerate action on the climate crisis in the months and years ahead.
Silver linings – laying new foundations for the future
Finally, one of the most notable aspects of big global events such as conflicts has been their ability to fundamentally re-shape how we think and do things.
It’s impossible to say whether the Covid-19 pandemic will have this effect. But if we pause for a moment and think about some of the crisis responses we’ve shared above, and consider what it will have taken, who would have been involved, and how quickly it has happened. And then if we imagine that this trend deepens and broadens across industries and geographies in the months to come. It surfaces some important questions.
What could this mean when it comes to embedding an impact mindset and skillset across all sorts of new functions from marketeers to logisticians? What could this mean when it comes to the way we innovate new sustainable solutions? How might this influence perceptions of business risk from threats such as climate change or water scarcity? How might the ‘viral’ concept of flattening the curve (with the key dotted line showing healthcare system limits) impact global perception of planetary limits? How might this shift our view on the organisational barriers to driving sustainability? And, maybe most importantly of all how might this change our collective view on what is really achievable in the next 10 years?
Questions to consider
Building on these thought starters and proof points we would love to explore the following questions in the first of our CONNECTED video conversations:
- What are the new/exacerbated challenges you are noticing from a sustainability perspective?
- How are you mobilising internally to respond positively to the crisis?
- What are the responses from peers and wider businesses that are impressing you the most?
- In what ways are you having to pivot at a national vs global level?
- How are you evolving your communications on sustainability in response to the Covid-19 pandemic?
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