Is There an Impact-led Recovery on the Horizon?
The outbreak of COVID-19 has impacted businesses, economies and individuals alike. Most governments responded by calling for prolonged lockdowns, social distancing and new working norms. It has been estimated that global growth will be -4.7 percent in 2020, making it the lowest since the Second World War. All countries have been impacted due to the pandemic, and uncertainty is the only constant at the moment.
While nations all across have been impacted severely, businesses too have been affected equally. But within the spectrum of industries, some have been affected more than others. It is visible that industries that are more reliant on human interaction have been the most affected. Sectors such as travel, hospitality, transportation, and manufacturing were the hardest hit amidst the pandemic. The impact faced was severe on all fronts, such as personnel, operations, supply chain, revenue and overall bottom line of these industries. For instance, the US Bureau of Labor Statistics recorded a drop of 132,000 workers in the air transportation industry between March to June 2020. The global airline industry, meanwhile, is expected to face losses amounting to $84 billion in 2020. Yet technology sectors such as e-commerce, over-the-top media, video games and video conferencing saw a spike – clearly depicting that people will adapt to continue their personal and work life.
Horasis is organizing the upcoming ‘Horasis Extraordinary Meeting’ – a virtual event scheduled for 1 October 2020, where we will bring together the best minds from governments, businesses, academia, and the media to discuss and develop actionable frameworks for economies to rebound.
Many businesses took it upon themselves to emerge from this downturn. Some responded by cutting costs, while some others by increasing their use of technology to continue reaching customers even during this time, such as through app-based deliveries and cashless payments.
Others are adapting in innovative ways by diversifying their product line, such as the global fashion and beauty house Coty that is pushing its e-commerce business and producing hand sanitizer gels to remain in business and keep its employees paid.
Experts are of the belief that it will take a coordinated and holistic approach – one that incorporates both profit alongside environmental and social benefits. The pandemic has accelerated the need for impact investing. By the end of Q2 2020, there were 534 index funds focused on ESG investing with a combined value of $250 billion.
BlackRock, a global investment management company, has committed $50 million as relief efforts to help individuals and communities who are in need of immediate help. A part of this relief has already been distributed around the world. A total of $10 million has been allotted to food banks and NGOs in the US to support the need of marginalized sections of the society hit by the pandemic. Meanwhile, $2 million has been donated to various food banks in India to provide meals to migrant workers who had lost their livelihoods due to the lockdown and were on the move home.
To overcome the impacts of a pandemic will need efforts that are inclusive and holistic. Some governments showed the way by incorporating positive eco policies. The city of Athens, for instance, announced to completely liberate public space from cars which will entail freeing up of 50,000 square meters of public space for pedestrians and cyclists. Such efforts have also been undertaken by other cities such as Dublin, Milan, Rome, Brussels, Berlin and Sydney to drive lasting changes. Many cities are leading by example on making positive changes that have only been made visible due to the worldwide lockdowns. If the changes stick, at least it would mean we have learnt from an adversity.
Impacting the Future Positively
Going forward ESG investing and its benefits need to be inculcated in the corporate culture. Policymakers and investors cannot afford to overlook environmental needs. ESG investing and awareness needs to become a mainstay among governments, businesses and investors.
Decades of focusing on economic activity and growth has digressed the attention from the pressing needs of the society and environment. The market today is saturated with investors who are more informed and the pandemic has provided the much-needed fillip to focus on economic growth that also factors in social and environmental growth.
This cannot be achieved overnight. We are aware, which is why we are doing our part by providing platforms for such issues to be discussed. The ‘Horasis Extraordinary Meeting’ will help in understanding ‘on-the-ground issues’ and allow all stakeholders to make informed decisions about both economic and environmental prosperity.
Photo Caption: Many cities, such as Athens, are leading by example on making positive changes that have only been made visible due to the worldwide lockdowns. Photo by Yu Siang Teo on Unsplash.