For corporates, it is readily accepted that climate change and environmental pressures are going to increasingly disrupt business as usual. However, in a time of a global pandemic and economic upheaval, some may assume that corporate action on climate change may drop down the priority list. However, our recent research has found that this is not the case. Covid-19 has actually resulted in sustainability gaining greater recognition in large companies around the world, especially those in the wholesale and retail sectors.
Over 70% of companies interviewed for our Corporate attitudes towards sustainability 2020 research said environmental management and/or sustainability priorities are likely to become ‘somewhat more important’ or ‘significantly more important’ for them as a result of Covid-19. Companies in the wholesale and retail sectors are the most optimistic about the growing importance of sustainability as a corporate priority – 84% of those interviewed in this sector said it would be ‘somewhat’ or ‘significantly more important’.
Large companies in Germany and Mexico are most likely to think their sustainability priorities will become more important as a result of the pandemic (82% and 79% of those interviewed in each country respectively).
Even those companies that have been significantly impacted by the pandemic still believe sustainability – which includes the use of natural resources and the reduction of environmental impact across the organisation – is going to become more important. Of those experiencing significant disruption, 69% expect environmental management and/or sustainability to become ‘somewhat’ or ‘significantly more important’.
We commissioned B2B International to undertake research which included interviews with 453 large companies in six countries (Germany, France, Mexico, Singapore, Spain, and the UK), in a wide range of sectors including manufacturing (22%), wholesale and retail (7%); and transport, storage and communication (7%). Three quarters of those interviewed said that their business had been negatively impacted by Covid-19. The worst disruption was experienced in Spain, but the impact was reasonably consistent across all geographies.
The research was undertaken in July of this year so does not reflect business confidence following more recent ‘second spikes’ in Europe especially, however the findings are consistent with our experience of increased demand for our corporate sustainability services. We feel that sustainability is rightly growing as a business priority, and this research shows that, despite extremely challenging market conditions, this is an area that businesses are continuing to prioritise.
What is driving this demand?
It appears that the pandemic has shone a bright light on the importance of properly assessing and mitigating risk and this has inevitably elevated sustainability issues in company boardrooms across the world. The climate crisis presents risks that no business can afford to ignore.
We also know that the pandemic has demonstrated all too well that denial and delay are deadly and provided many valuable lessons that apply equally to the management of climate risk (for more on this read: Learning from coronavirus: why 2020 matters for climate).
Many companies are also responding to a shift in customer demand. The majority of companies (74%) believe that sustainability will become more important to their customers as a result of Covid-19 – with almost a third saying it will become ‘significantly more important for their customers’ – and this is especially the case in Mexico (82%), Germany (81%) and Spain (79%).
Another positive is that budgets are also increasing – 63% of those interviewed said their sustainability budgets will get ‘significantly’ or ‘somewhat bigger’ and only 16% said they would be ‘somewhat smaller’.
The research findings come at a vital time given the urgency of focusing on, and delivering, a green recovery – achieving net zero targets at the same time as fostering economic activity. Without corporate involvement, a green recovery will be challenging to deliver, so the research is great news. We know from our work with clients on their net zero targets and strategies, that many will be leading the way.
This blog was written and contributed by:
Managing Director, Advisory
The Carbon Trust